State Budget recognises importance of IT Industry    
          Finance Minister Siddaramaiah presented the State Budget for 1998-99 on 18 March, with an overall deficit of Rs 196.62 crore. The government has recognised that Bangalore has emerged as the leading software centre in India and a new department of Information Technology is being set up.

The budget provides incentives and concessions to the private sector involved in infrastructure projects. A cess on certain taxes would be collected in the entire state and be used as equity for the creation of Karnataka Infrastructure Development and Finance Corporation, which would invest Rs 800 crore in infrastructure projects, mainly roads and bridges, over the next 3 years.


   Duty on Power of Attorney 
          In sale transactions pertaining to immovable properties, Power of Attorney is obtained coupled with Agreement to sell. A 2% duty (on market value of property) is to be levied if power of attorney is executed in favour of persons (other than family* members of the seller) authorising the power of attorney holder to sell the property. The duty paid on such power of attorney is adjustable on subsequent sale deed, if executed.

* Family includes father, mother, husband, wife, son, daughter.


   Relief for Joint Development Agreements 
          At present, duty is being charged at 6% ad valorem on Joint Development Agreements for construction or development or sale or transfer of immovable property. This is now proposed to be charged at 4% ad valorem subject to a maximum of Rs 4 lakhs.

   Will BJP keep its promise ? 
          The Bharatiya Janata Party had put real estate reforms high on its agenda and manifesto. We will immediately reform the ULCRA, if our party comes to power, Vijay Kumar Malhotra, MP, had stated categorically. The Gujral government had identified real estate as the one industry which would kick-start the sagging economy. It was pointed out that of every rupee spent, at least 87 paise comes directly or indirectly into this sector.

It remains to be seen whether the BJP will keep its promise and extend the economic reforms to the real estate industry.

From the BJP manifesto
Evolve a national housing and habitat policy in consultation with state governments and urban development authorities. Shelter for all by 2010 and 20 lakh new houses every year.
Review Urban Land Ceiling Regulation Act and ensure property prices do not escalate
Promote affordable middle class housing
Make adequate credit available to house-seekers on attractive terms
Take steps to make additional rented accommodation available
Launch special concession schemes to provide rural poor with affordable housing.


   Assocham suggests top priority for housing 
          The Associated Chambers of Commerce and Industry of India (Assocham) has suggested that the new government should give top priority to housing, real estate and the construction sector to get over the present slowdown in industrial activity. The chambers alternate president K.P. Singh suggested encouragement of investment from overseas corporate bodies, especially in urban infrastructure; priority funding by banks; cutting cumulative burden on all property related taxes to 25%; uniform stamp duty ranging from 1% to 5%; allowing at least 10% of the annual accretion in the PPF for investment in housing finance institutions; promotion of mutual funds in real estate and the setting up of a self-regulatory body, the National Real Estate Development council (Naredco) to deal with all aspects of development of real estate.

   New construction cost index sought 
          The construction industry has petitioned the government for creation of a new construction cost index. This would help in accurate project planning as the present inflation indices do not reflect the true picture. Even the government will find such an index useful as it can then effectively plan for creation of resources like steel, at a national level. This was stated by the Construction Industry Development Council Director, P.R. Swarup.

For the contractors, the indices will be useful in the optimisation of resource utilisation, besides economising various construction activities, he said.


   Not down in the dumps 
          Contrary to prevalent impression, there has been a healthy growth in house purchases in recent months. This is borne out by the loan disbursals for the first nine months of the current financial year by the principal housing finance companies. Housing Development Finance Corporation (HDFC), which has the lions share of 54% of the market in home loans, saw a growth of 23.78% in loan disbursals for the first nine months of 1997-98 as compared to 24.78% increase in disbursals in 1996-97 over the previous year.

Lower prices have given a push to housing finance, as it means a lower cost of home loans says Mr D Souza, HDFCs marketing services chief. With the estimated housing shortage likely to be around 41 million units by 2000 AD, there can hardly be any let up for the demand for housing and consequently for housing finance, adds Mr Y.P. Gupta, LICHFLs chief executive.