It’s been a year since the Narendra Modi government announced it was scrapping the Goods and Services Tax, and the country has witnessed a surge in the price of housing.
But, what if there is no way of knowing the true market price of houses?
This is where a housing finance plan comes in.
While the Narendra Modis government has taken a more stringent approach towards housing than other countries, this plan will not make a difference in the real estate market.
In fact, the plans could even be used to generate funds for the government to buy more properties and finance projects.
While housing finance has a long history in India, there is still a lack of transparency in the market.
The plan is likely to be the first such proposal of its kind, says Mitesh Gopalan, chief economist, Rakesh Jha & Nirmala Sengupta, managing director, Kalyani.
A housing finance roadmap would allow the government, in the future, to make better use of the resources it has to purchase more properties.
For instance, if the government wants to purchase a property from an estate agent, it can do so through the Housing Finance Plan.
While this plan is a good first step, there are many other steps that can be taken, says Gopaman.
For example, the government should not only focus on buying more properties, it should also look at other financial options like selling shares or loans.
“In the long run, a plan to increase the availability of housing is a big step towards achieving real estate reform,” says Gootal.