April 04, 2018

Credai asks the ministry of housing to enhance India’s standing in granting construction approvals and provide appropriate means for land financing to construct affordable houses

Expressing concern over the lack of ease of attaining construction approvals from government authorities, the apex body of private real estate developers Credai has said that this has had a negative impact on the cost of projects and delivery.

Government authorities need to understand the severity of the situation, especially given India’s poor ranking of 181 in the Dealing with Construction Permit category in The World Bank’s Ease of Doing Business report, it said.

“We request the ministry of housing and urban affairs to implement the single window clearance mechanism which will not only largely resolve some of the operational issues prevalent in the industry but would also reduce property prices by around 25 to 40 percent,” it said in a letter to Hardeep Puri, minister of housing and urban affairs.

The real estate body has also asked the housing ministry to initiate certain amendments such as implementing the single window clearance mechanism in the real estate sector.

The body has also urged the government authorities to address issues such as reducing the high GST rate of 12 percent on all homes purchased and not only those under CLSS and provide for appropriate means for land financing to build houses under the affordable housing segment.

The real estate body is of the opinion that despite the segment being granted infrastructure status, it is difficult for developers to obtain finance to build affordable houses due to the banking and financial institutions not recognising the infrastructure status given to affordable housing.

Reforms such as adoption of the environmental norms in the local building bye-laws of respective states/ development authorities are also stuck after NGT sent across its observations on the amendment passed by the concerned ministry.

“Currently, there are a number of pressing issues pertaining to the Indian real estate sector that need to be addressed on an immediate basis. For a start, attaining construction permits and approvals is an extremely tedious task for real estate developers in the country. The government authorities need to understand the severity of the situation, especially given India’s poor ranking of 181 in the Dealing with Construction Permit category in The World Bank’s Ease of Doing Business report. Hence, we request the ministry of housing and urban affairs to implement the single window clearance mechanism which will not only largely resolve some of the operational issues prevalent in the industry but could also reduce property prices by around 25 percent to 40 percent,” says Credai National president Jaxay Shah.

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Source: moneycontrol.com