CREDAI MCHI Requests Government Intervention to Implement New Input Cost Containment Measures

From increasing the price of unsold inventory to lowering supply chain costs, the Confederation of Real Estate Developers' Association of India (CREDAI) - Maharashtra Chapter of the Housing Industry is considering a variety of strategies (MCHI). 

The state's main real estate regulatory body said recently that it is considering stringent steps to rein in growing input prices of raw materials, which have pushed the cost of construction to about INR 400–600 (approx.) per square foot in the affordable housing sector. This has had a detrimental effect on developers nationwide, as the pressure continues to mount.

While CREDAI-MCHI disputed reports of suspending building in the state for the time being, they would explore the possibility if other current efforts do not give the required reprieve. Several steps are being examined at the moment, including increasing the pricing of unsold goods that has not been delivered by 10-15 percent to offset growing input costs. 

This decision will affect not only the 2,773 projects authorised by MCGM in 2021, but also many more, totaling 2,60,000 units over the following three years.

While the recent request for deferment of the Metro Cess and discussions on reducing the stamp duty are reforms that CREDAI-MCHI continues to emphasise, CREDAI-MCHI Secretary Dhaval Ajmera also stated, "As an apex body, we are gravely concerned about the evolving situation on rising raw material costs such as steel and cement and their significant impact on ongoing growth." 

Developers have borne this added expense for a lengthy period of time and will now be forced to pass it on to homeowners. We will continue to participate in communication with different Ministries and interested agencies to discuss our proposals for progressive reductions in steel exports, the inclusion of input tax credits under the GST programme, and the extension of the tax-saving section 80-IB option to affordable housing."