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Tourism, housing key to higher economic growth: CII

BS Corporate Bureau

The Confederation of Indian Industry has identified housing and tourism as two key sectors having a potential to speed-up economic growth through their linkages with the overall economy. "Housing and tourism have the potential to bring back growth in the economy," CII said in a release.

It said the government should provide adequate incentives to those two sectors in the coming budget, keeping in mind their economic potential in terms of wealth creation, employment and foreign exchange.

"The housing sector, which has forward and backward linkages with about 280 industries, is still in its infancy in the country," the chamber said.

According to CII, a 10 per cent increase in spending in the construction sector can push the gross domestic product growth by 3 per cent.

According to CII, the current supply to demand ratio in the housing sector stands at a dismal 1:3. The share of investment in this sector compared to the total investment in the economy had declined from 34.2 per cent in the First Five-Year-Plan to a mere 9.7 per cent in the Eighth Plan, the chamber added.

CII has urged the government to grant infrastructure and industry status to the housing sector. It has also suggested the repeal of the Urban Land Ceiling Regulation Act.

CII has also sought amendment to those rent control laws that hamper private investment flows into the sector.

The chamber said the interest rate on housing loans should be brought down to 10 per cent from the current 13.5-16 per cent, as the current rate of inflation stood below 3 per cent.

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