Quote on Real Estate Regulatory Bill – Mr. Amit Modi, Director ABA Corp and Vice President CREDAI Western UP
“A regulator to curb malpractices in the real estate sector is welcome hence we whole heartedly welcome this bill but we still feel a law without making all the stakeholders concerned accountable, will not be able to help the purpose at large. Projects are often delayed due to graft in the issuance of permits and clearances.
Government agencies issuing permits should be brought under the law and made accountable for undue delays. On an average it takes 2-3 years to start a project after land is acquired; by this time the cost of land rises by 24-30 per cent due to hefty interest payments as bank loans are not available for procuring important raw material in this sector. The added cost ultimately gets passed on to the customer. These costs can be curtailed and passed on to the consumer, if developers can start building faster and also deliver larger volumes quicker for the consumer.
In most states, real estate developers are required to get 40-70 approvals before starting a project. Currently, realtors have to seek approvals from National Highways Authority of India, the pollution department, ministry of environment, Airports Authority of India, labour ministry, Central Ground Water Board and Directorate General of Civil Aviation among many other sub-departments. Clearances from the water department, electricity board, coastal regulation zone tribunal, sewage department and fire department are also required before starting a new project. Local bodies’ inspection and frequent changes in local laws add up cup of woes.
Apart from approvals and time-delays, regulatory mandates like getting plinth certificates at the completion of each floors, hassles in getting occupancy certificates and obtaining ‘non-agricultural land clearance’ for land that is already under the city development plan are also creating a havoc on a real estate developer.
The whole process of approvals must be made online to reduce corruption and bribery, which is rampant in the business, and unless there is a single window clearance, low cost housing will never happen in this country and restrictive ad-hoc rules on usage must go.”
