THE government may restore tax benefits to real estate developers for constructing houses for the economically weaker section (EWS). The scheme was discontinued last year. Under section 80(1)(B) of the Income-Tax Act, developers constructing houses with an area of up to 1,000 sq ft in Delhi and Mumbai and 1,500 sq ft in other cities can avail of tax exemption on profits. The urban housing ministry has asked the finance ministry to consider the proposal. According to an housing ministry estimate, the urban housing backlog with increased urbanisation in India assumes alarming proportions, especially for the EWS and low-income group (LIG), which constitute more than 99% of the total housing shortage of 24.71 million in urban areas. This magnitude of backlog is evident by the fact that 21% of India’s urban population lives in slum-like conditions and 35% in one-room tenements. “In order to give this segment of the society better life and housing at affordable rates, there is a need to incentivise the industry,” an official said. Public housing agencies have been at the forefront of providing housing for the EWS. Given the magnitude of the housing shortage and budgetary constraints of both central and state governments, it is amply clear that public sector efforts will not suffice in fulfilling the housing demand. “Therefore, the private sector has to play a more proactive role in taking up housing programmes on a massive scale for the poor and low-income groups with social commitments,” the official said. The government also intends to involve the private sector in the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for completion of 1.5 million dwelling units in the country by the end of 2012. According to National Housing Bank (NHB) data, the government has not been able to meet its target of housing for low income groups. In 1999-2000, against a target of 44,000 units in LIG, only 27,000 were constructed, while in the economically-weaker section (EWS) category, against a target of 96,571 units, only 28,541 were constructed. The housing ministry is of the view that the premium housing has already taken off in a big way and the private sector’s contribution to the segment has been well established and with market forces determining a return on investment here, the private sector will continue to build in the category.