hindu.com,Saturday, Aug 08, 2009

An impetus to rural housing, tax holidays and a cut in stamp duty are some of the demands of the builders. K.A. MARTIN says the builders feel let down by the State government.

The Kerala Builders' Association has suggested exempting flats with areas less than 100 sq.m (about 1,000 sq.ft) in rural areas from within the purview of the value-added tax regime

The association has suggested tax holidays for a limited period for the building and real estate sector in view of the hard times it faces. The concession will help it come out better from the lull.

M.D. Jairaj, president of the association, says that giving incentives to builders in rural areas can help then offer affordable houses in rural areas to the common man. Besides, he says, this can help people in search of affordable homes move from urban to rural areas.

The association, representing nearly 150 builder members in the State, sees signs of a revival in the housing market in Kerala.

However, Dr. Jairaj alleges that the government is looking at builders as enemies and acting in a way that will render futile their efforts to survive these times of economic recession.

There is, he says, a widespread allegation that tax collection from the sector is low.

This has led the government and the taxes department to treat them from this perspective. The association demands that the government and the department do something to protect the sector, which provides lakhs of jobs in the organised sector.

The sector is straddled with taxes. It pays around 33 per cent, including tax on inputs, he adds.

The sector has been the worst hit in the economic recession. Added to this is a fear psychosis over the recession that scared away potential investors.

The government has admitted to a dip in revenue from registrations in the recent past. However, the association feels that the actual revenue fall may have been more than what is claimed. But the situation may have been helped by the ongoing drive opened by the Registration Department to settle cases related to undervaluation of property.

The association, says T. Padmajan, its general secretary, has been demanding remedial measures for several problems facing the sector. These demands and appeals have fallen on deaf ears.

One of the demands is reduction in stamp duty. The stamp duty in Kerala is one of the highest in the country and scares away buyers. A cut in this can create a more robust property market.

Taking into consideration the present financial crisis faced by the builders, the government should consider allowing them to defer the payment of labour welfare cess.

Individual structural plans for each panchayat is another demand. According to them, each panchayat should have land-use rules to make planning easier.

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