Don't depend on sops, work in market economy: Jaitley to builders

Mumbai: Terming the real estate sector as an important engine for faster growth, Finance Minister Arun Jaitley on Saturday said developers should not depend on government subsidies but should learn to survive in the market economy.

"The essence of the real estate industry cannot be that you can only survive on subsidies. Developers will have to survive on the strength of the market economy itself and the on ability of our banks to finance them," Jaitley said at the Credai-Bankcon summit here.

Promising to help the industry tide over its problems, Jaitley said, "We will certainly examine the issues raised by the industry. I believe the age of slowdown of the realty sector in the last few years should now come to an end and we should look for far greater economic activity and better housing for all."

Apart from delays in approvals and land acquisition, real estate players have been raising concerns over lack of cheaper funds as most banks are reluctant to fund realty projects, and developers complain private equity is expensive.

Stating that the real estate sector is going to be the next big mover in the economy, Jaitley said, "While we need to create more townships and smart cities, at the same time, we need to link suburban areas with good infrastructure and connectivity."

Admitting that there are difficulties in getting land for large realty projects, the minister said it is a state issue and expressed that hope that states which want progress will make enabling changes to ensure easy availability of land and affordable housing.

"High interest rates had impacted the real estate sector adversely, but it is a pre-requisite that we keep inflation under control for a sustained period of time to so that the entire economy grows faster for long time," he said.

The minister also reiterated the government's commitment to make affordable houses for all by 2022.