SRZ a concept whose time has come.A nice article by Kumar Gera explaining SRZs.
It is well documented and tacit that India is one of the fastest growing economies in the world along with being the second most populated country. An interesting point to note is that the urban population of India is likely to grow from 285.3 million in 2001(Census 2001) to 360 million in 2010, and further to 533 million in 2025.
Furthermore, as per the 1999-2000 census, the share of agriculture in the total workforce has shown considerable decline to 57% from 60% in 1993-94, while the share of the primary sector is likely to decline further to 37% in 2030. This means that a large number of the rural workforce will migrate to urban areas in search of jobs in the secondary and tertiary sectors. If immigrants do not have access to employment, shelter and related services, they will contribute to mushrooming growth of slums and substandard habitat. Correspondingly, the sheer growth of the economy, combined with rapid urbanisation of the population, has created conditions that lead to a housing price rise. Transformation of this scale needs to be complemented by adequate living conditions for this newly urbanised segment.
Looking at a situation like this, it is the right time for the government to take meaningful steps to create a policy which addresses the problem of housing for all.
SRZ - The concept India already has a workable model in the form of SEZs, albeit not in the housing space, which I believe can be effectively applied with some modifications. In fact, the National Housing & Habitat Policy 2007 is in conjunction with the idea of an special residential Zone (SRZ) to address the housing problem, especially for those who need the minimum size of homes due to limited affordability.
Before elucidating the concept of an SRZ, I would like to evaluate the current scenario in the Indian real estate sector. According to the latest statistics, the pan-India average rate (per sqft) for a residential apartment is around Rs 2,700, of which Rs 700 per sqft (about 25%) can be directly attributed to various local, state and central duties and levies and direct & indirect taxes such as VAT, service tax, TDS, stamp duty on sale, on land, income tax on profit of development, materials, services, octroi, etc. It is discernible that this huge tax component is prohibitive and acts as a significant barrier for private participation in large-scale housing projects for the cost conscious urbanised mass market. Any attempt in creating low-cost housing projects in the current market situation ultimately leads to poor construction and infrastructure quality, and lowered standard of living. Bearing in mind such a situation, we see a mismatch in the demand and supply of quality housing that is affordable. Therefore, there is a need to create an economic vehicle that supports and receives the demand for good quality affordable housing. A SRZ is a viable and compelling solution to tackle the compounding problem of affordable housing on a pan-India basis.
By definition, an can be a notified geographical region that is free of domestic taxes, levies and duties, with special development rules to promote large scale, Greenfield, affordable housing projects for the country's masses. An SRZ would have a prescribed minimum number of dwelling units with a maximum prescribed size, and each SRZ would require adequate social infrastructure, including schools, medical facilities, etc. Put simply, an SRZ is a special zone which contains catchments of residential properties that have been accorded fiscal benefits in order to bring down the cost of housing and create a massive deliberate urban agglomeration that services the local commercial activity and vice-versa. Here, the key idea is to create an interdependent living system which is not only self-sufficient but also has the potential to grow and inject growth into geographical areas around the SRZ.
As the learnings of SEZs notified/functioning in India have already shown, creating the right economic and regulatory environment can bring in rapid prosperity on a large scale. In a similar fashion, if the government creates similar concessions for specific geographic regions, earmarked for developing large, sustainable developments for small residential units, it would result in a massive spatial reorganisation of the urban population across the country that could be leveraged to positively grow the economy as a whole, in addition to providing affordable housing for all.
Making housing affordable SRZ entails several benefits and provides a concrete framework that is both ethically and economically pleasing to all the participants concerned including the family which receives the benefits of improved, affordable living condition. It ensures decreased housing cost bringing good quality low cost Greenfield housing to the mass market supported by a sustainable living infrastructure with integrated schools, medical facilities and playgrounds etc. The SRZ would also bring housing activities under one umbrella, leading to better organisation and implementation of national specifications and policies on a pan-India basis. Further, massive employment generation in and around the SRZ will lead to an improvement in the per capita income and the GDP in addition, various forward and backward linkages, will create additional employment opportunities as well. It will also help in controlling the slum population by presenting slum residents with an option of affordable housing. Systematic urban agglomeration instead of an organic one, resulting in better redistribution of resources and upliftment of living standards is another important feature of SRZ. In addition, the time saved on account of faster project completion directly translates into a quicker release of locked funds that positively impacts the ROI and encourages more investments. Again, duties, taxes and other levies from the resultant growth in economic activity will add to the revenue of the exchequer, ultimately benefiting the government at the centre, state, and local levels.
Looking into the future Over the past 50 years, the government has announced several developmental schemes to alleviate housing conditions. However, these have had limited impact on the population, towards which they were targeted. This reiterates the cause for a uniform geographical region governed by a fiscal authority.
Housing, being next to food and clothing, holds the key to accelerate the pace of development. Invesments in housing like any other industry, has a multiplier effect on income and employment. The housing sector alone accounts for 85.5 lakh workers, which is 55% of the total construction work force. Given the importance of the housing sector, it is imperative that the government starts planning for systematically leveraging the urban growth by creating good quality affordable housing that would steer economic development.
To summarise, an SRZ layered with the right economic benefits in the form of specific waivers and exemptions from direct and indirect taxes and duties and levies across the board would create the right environment for developers and the government to come together and create something unique for the urbanised Indian mass market consumer who needs basic affordable housing.
I T is well documented and tacit that India is one of the fastest growing economies in the world along with being the second most populated country. An interesting point to note is that the urban population of India is likely to grow from 285.3 million in 2001(Census 2001) to 360 million in 2010, and further to 533 million in 2025. Furthermore, as per the 1999-2000 census, the share of agriculture in the total workforce has shown considerable decline to 57% from 60% in 1993-94, while the share of the primary sector is likely to decline further to 37% in 2030. This means that a large number of the rural workforce will migrate to urban areas in search of jobs in the secondary and tertiary sectors. If immigrants do not have access to employment, shelter and related services, they will contribute to mushrooming growth of slums and substandard habitat. Correspondingly, the sheer growth of the economy, combined with rapid urbanisation of the population, has created conditions that lead to a housing price rise. Transformation of this scale needs to be complemented by adequate living conditions for this newly urbanised segment. Looking at a situation like this, it is the right time for the government to take meaningful steps to create a policy which addresses the problem of housing for all. SRZ - The concept India already has a workable model in the form of SEZs, albeit not in the housing space, which I believe can be effectively applied with some modifications. In fact, the National Housing & Habitat Policy 2007 is in conjunction with the idea of an special residential Zone (SRZ) to address the housing problem, especially for those who need the minimum size of homes due to limited affordability. Before elucidating the concept of an SRZ, I would like to evaluate the current scenario in the Indian real estate sector. According to the latest statistics, the pan-India average rate (per sqft) for a residential apartment is around Rs 2,700, of which Rs 700 per sqft (about 25%) can be directly attributed to various local, state and central duties and levies and direct & indirect taxes such as VAT, service tax, TDS, stamp duty on sale, on land, income tax on profit of development, materials, services, octroi, etc. It is discernible that this huge tax component is prohibitive and acts as a significant barrier for private participation in large-scale housing projects for the cost conscious urbanised mass market. Any attempt in creating low-cost housing projects in the current market situation ultimately leads to poor construction and infrastructure quality, and lowered standard of living. Bearing in mind such a situation, we see a mismatch in the demand and supply of quality housing that is affordable. Therefore, there is a need to create an economic vehicle that supports and receives the demand for good quality affordable housing. A SRZ is a viable and compelling solution to tackle the compounding problem of affordable housing on a pan-India basis. By definition, an can be a notified geographical region that is free of domestic taxes, levies and duties, with special development rules to promote large scale, Greenfield, affordable housing projects for the country's masses. An SRZ would have a prescribed minimum number of dwelling units with a maximum prescribed size, and each SRZ would require adequate social infrastructure, including schools, medical facilities, etc. Put simply, an SRZ is a special zone which contains catchments of residential properties that have been accorded fiscal benefits in order to bring down the cost of housing and create a massive deliberate urban agglomeration that services the local commercial activity and vice-versa. Here, the key idea is to create an interdependent living system which is not only self-sufficient but also has the potential to grow and inject growth into geographical areas around the SRZ. As the learnings of SEZs notified/functioning in India have already shown, creating the right economic and regulatory environment can bring in rapid prosperity on a large scale. In a similar fashion, if the government creates similar concessions for specific geographic regions, earmarked for developing large, sustainable developments for small residential units, it would result in a massive spatial reorganisation of the urban population across the country that could be leveraged to positively grow the economy as a whole, in addition to providing affordable housing for all. Making housing affordable SRZ entails several benefits and provides a concrete framework that is both ethically and economically pleasing to all the participants concerned including the family which receives the benefits of improved, affordable living condition. It ensures decreased housing cost bringing good quality low cost Greenfield housing to the mass market supported by a sustainable living infrastructure with integrated schools, medical facilities and playgrounds etc. The SRZ would also bring housing activities under one umbrella, leading to better organisation and implementation of national specifications and policies on a pan-India basis. Further, massive employment generation in and around the SRZ will lead to an improvement in the per capita income and the GDP in addition, various forward and backward linkages, will create additional employment opportunities as well. It will also help in controlling the slum population by presenting slum residents with an option of affordable housing. Systematic urban agglomeration instead of an organic one, resulting in better redistribution of resources and upliftment of living standards is another important feature of SRZ. In addition, the time saved on account of faster project completion directly translates into a quicker release of locked funds that positively impacts the ROI and encourages more investments. Again, duties, taxes and other levies from the resultant growth in economic activity will add to the revenue of the exchequer, ultimately benefiting the government at the centre, state, and local levels. Looking into the future Over the past 50 years, the government has announced several developmental schemes to alleviate housing conditions. However, these have had limited impact on the population, towards which they were targeted. This reiterates the cause for a uniform geographical region governed by a fiscal authority. Housing, being next to food and clothing, holds the key to accelerate the pace of development. Investments in housing like any other industry, has a multiplier effect on income and employment. The housing sector alone accounts for 85.5 lakh workers, which is 55% of the total construction work force. Given the importance of the housing sector, it is imperative that the government starts planning for systematically leveraging the urban growth by creating good quality affordable housing that would steer economic development. To summarise, an SRZ layered with the right economic benefits in the form of specific waivers and exemptions from direct and indirect taxes and duties and levies across the board would create the right environment for developers and the government to come together and create something unique for the urbanised Indian mass market consumer who needs basic affordable housing.
Furthermore, as per the 1999-2000 census, the share of agriculture in the total workforce has shown considerable decline to 57% from 60% in 1993-94, while the share of the primary sector is likely to decline further to 37% in 2030. This means that a large number of the rural workforce will migrate to urban areas in search of jobs in the secondary and tertiary sectors. If immigrants do not have access to employment, shelter and related services, they will contribute to mushrooming growth of slums and substandard habitat. Correspondingly, the sheer growth of the economy, combined with rapid urbanisation of the population, has created conditions that lead to a housing price rise. Transformation of this scale needs to be complemented by adequate living conditions for this newly urbanised segment.
Looking at a situation like this, it is the right time for the government to take meaningful steps to create a policy which addresses the problem of housing for all.
SRZ - The concept India already has a workable model in the form of SEZs, albeit not in the housing space, which I believe can be effectively applied with some modifications. In fact, the National Housing & Habitat Policy 2007 is in conjunction with the idea of an special residential Zone (SRZ) to address the housing problem, especially for those who need the minimum size of homes due to limited affordability.
Before elucidating the concept of an SRZ, I would like to evaluate the current scenario in the Indian real estate sector. According to the latest statistics, the pan-India average rate (per sqft) for a residential apartment is around Rs 2,700, of which Rs 700 per sqft (about 25%) can be directly attributed to various local, state and central duties and levies and direct & indirect taxes such as VAT, service tax, TDS, stamp duty on sale, on land, income tax on profit of development, materials, services, octroi, etc. It is discernible that this huge tax component is prohibitive and acts as a significant barrier for private participation in large-scale housing projects for the cost conscious urbanised mass market. Any attempt in creating low-cost housing projects in the current market situation ultimately leads to poor construction and infrastructure quality, and lowered standard of living. Bearing in mind such a situation, we see a mismatch in the demand and supply of quality housing that is affordable. Therefore, there is a need to create an economic vehicle that supports and receives the demand for good quality affordable housing. A SRZ is a viable and compelling solution to tackle the compounding problem of affordable housing on a pan-India basis.
By definition, an can be a notified geographical region that is free of domestic taxes, levies and duties, with special development rules to promote large scale, Greenfield, affordable housing projects for the country's masses. An SRZ would have a prescribed minimum number of dwelling units with a maximum prescribed size, and each SRZ would require adequate social infrastructure, including schools, medical facilities, etc. Put simply, an SRZ is a special zone which contains catchments of residential properties that have been accorded fiscal benefits in order to bring down the cost of housing and create a massive deliberate urban agglomeration that services the local commercial activity and vice-versa. Here, the key idea is to create an interdependent living system which is not only self-sufficient but also has the potential to grow and inject growth into geographical areas around the SRZ.
As the learnings of SEZs notified/functioning in India have already shown, creating the right economic and regulatory environment can bring in rapid prosperity on a large scale. In a similar fashion, if the government creates similar concessions for specific geographic regions, earmarked for developing large, sustainable developments for small residential units, it would result in a massive spatial reorganisation of the urban population across the country that could be leveraged to positively grow the economy as a whole, in addition to providing affordable housing for all.
Making housing affordable SRZ entails several benefits and provides a concrete framework that is both ethically and economically pleasing to all the participants concerned including the family which receives the benefits of improved, affordable living condition. It ensures decreased housing cost bringing good quality low cost Greenfield housing to the mass market supported by a sustainable living infrastructure with integrated schools, medical facilities and playgrounds etc. The SRZ would also bring housing activities under one umbrella, leading to better organisation and implementation of national specifications and policies on a pan-India basis. Further, massive employment generation in and around the SRZ will lead to an improvement in the per capita income and the GDP in addition, various forward and backward linkages, will create additional employment opportunities as well. It will also help in controlling the slum population by presenting slum residents with an option of affordable housing. Systematic urban agglomeration instead of an organic one, resulting in better redistribution of resources and upliftment of living standards is another important feature of SRZ. In addition, the time saved on account of faster project completion directly translates into a quicker release of locked funds that positively impacts the ROI and encourages more investments. Again, duties, taxes and other levies from the resultant growth in economic activity will add to the revenue of the exchequer, ultimately benefiting the government at the centre, state, and local levels.
Looking into the future Over the past 50 years, the government has announced several developmental schemes to alleviate housing conditions. However, these have had limited impact on the population, towards which they were targeted. This reiterates the cause for a uniform geographical region governed by a fiscal authority.
Housing, being next to food and clothing, holds the key to accelerate the pace of development. Invesments in housing like any other industry, has a multiplier effect on income and employment. The housing sector alone accounts for 85.5 lakh workers, which is 55% of the total construction work force. Given the importance of the housing sector, it is imperative that the government starts planning for systematically leveraging the urban growth by creating good quality affordable housing that would steer economic development.
To summarise, an SRZ layered with the right economic benefits in the form of specific waivers and exemptions from direct and indirect taxes and duties and levies across the board would create the right environment for developers and the government to come together and create something unique for the urbanised Indian mass market consumer who needs basic affordable housing.
I T is well documented and tacit that India is one of the fastest growing economies in the world along with being the second most populated country. An interesting point to note is that the urban population of India is likely to grow from 285.3 million in 2001(Census 2001) to 360 million in 2010, and further to 533 million in 2025. Furthermore, as per the 1999-2000 census, the share of agriculture in the total workforce has shown considerable decline to 57% from 60% in 1993-94, while the share of the primary sector is likely to decline further to 37% in 2030. This means that a large number of the rural workforce will migrate to urban areas in search of jobs in the secondary and tertiary sectors. If immigrants do not have access to employment, shelter and related services, they will contribute to mushrooming growth of slums and substandard habitat. Correspondingly, the sheer growth of the economy, combined with rapid urbanisation of the population, has created conditions that lead to a housing price rise. Transformation of this scale needs to be complemented by adequate living conditions for this newly urbanised segment. Looking at a situation like this, it is the right time for the government to take meaningful steps to create a policy which addresses the problem of housing for all. SRZ - The concept India already has a workable model in the form of SEZs, albeit not in the housing space, which I believe can be effectively applied with some modifications. In fact, the National Housing & Habitat Policy 2007 is in conjunction with the idea of an special residential Zone (SRZ) to address the housing problem, especially for those who need the minimum size of homes due to limited affordability. Before elucidating the concept of an SRZ, I would like to evaluate the current scenario in the Indian real estate sector. According to the latest statistics, the pan-India average rate (per sqft) for a residential apartment is around Rs 2,700, of which Rs 700 per sqft (about 25%) can be directly attributed to various local, state and central duties and levies and direct & indirect taxes such as VAT, service tax, TDS, stamp duty on sale, on land, income tax on profit of development, materials, services, octroi, etc. It is discernible that this huge tax component is prohibitive and acts as a significant barrier for private participation in large-scale housing projects for the cost conscious urbanised mass market. Any attempt in creating low-cost housing projects in the current market situation ultimately leads to poor construction and infrastructure quality, and lowered standard of living. Bearing in mind such a situation, we see a mismatch in the demand and supply of quality housing that is affordable. Therefore, there is a need to create an economic vehicle that supports and receives the demand for good quality affordable housing. A SRZ is a viable and compelling solution to tackle the compounding problem of affordable housing on a pan-India basis. By definition, an can be a notified geographical region that is free of domestic taxes, levies and duties, with special development rules to promote large scale, Greenfield, affordable housing projects for the country's masses. An SRZ would have a prescribed minimum number of dwelling units with a maximum prescribed size, and each SRZ would require adequate social infrastructure, including schools, medical facilities, etc. Put simply, an SRZ is a special zone which contains catchments of residential properties that have been accorded fiscal benefits in order to bring down the cost of housing and create a massive deliberate urban agglomeration that services the local commercial activity and vice-versa. Here, the key idea is to create an interdependent living system which is not only self-sufficient but also has the potential to grow and inject growth into geographical areas around the SRZ. As the learnings of SEZs notified/functioning in India have already shown, creating the right economic and regulatory environment can bring in rapid prosperity on a large scale. In a similar fashion, if the government creates similar concessions for specific geographic regions, earmarked for developing large, sustainable developments for small residential units, it would result in a massive spatial reorganisation of the urban population across the country that could be leveraged to positively grow the economy as a whole, in addition to providing affordable housing for all. Making housing affordable SRZ entails several benefits and provides a concrete framework that is both ethically and economically pleasing to all the participants concerned including the family which receives the benefits of improved, affordable living condition. It ensures decreased housing cost bringing good quality low cost Greenfield housing to the mass market supported by a sustainable living infrastructure with integrated schools, medical facilities and playgrounds etc. The SRZ would also bring housing activities under one umbrella, leading to better organisation and implementation of national specifications and policies on a pan-India basis. Further, massive employment generation in and around the SRZ will lead to an improvement in the per capita income and the GDP in addition, various forward and backward linkages, will create additional employment opportunities as well. It will also help in controlling the slum population by presenting slum residents with an option of affordable housing. Systematic urban agglomeration instead of an organic one, resulting in better redistribution of resources and upliftment of living standards is another important feature of SRZ. In addition, the time saved on account of faster project completion directly translates into a quicker release of locked funds that positively impacts the ROI and encourages more investments. Again, duties, taxes and other levies from the resultant growth in economic activity will add to the revenue of the exchequer, ultimately benefiting the government at the centre, state, and local levels. Looking into the future Over the past 50 years, the government has announced several developmental schemes to alleviate housing conditions. However, these have had limited impact on the population, towards which they were targeted. This reiterates the cause for a uniform geographical region governed by a fiscal authority. Housing, being next to food and clothing, holds the key to accelerate the pace of development. Investments in housing like any other industry, has a multiplier effect on income and employment. The housing sector alone accounts for 85.5 lakh workers, which is 55% of the total construction work force. Given the importance of the housing sector, it is imperative that the government starts planning for systematically leveraging the urban growth by creating good quality affordable housing that would steer economic development. To summarise, an SRZ layered with the right economic benefits in the form of specific waivers and exemptions from direct and indirect taxes and duties and levies across the board would create the right environment for developers and the government to come together and create something unique for the urbanised Indian mass market consumer who needs basic affordable housing.
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