In the past five years, unaffordable homes, slowing economy, and increase in interest rates increased home prices over 50-150% across various cities in India, which led to decline in home sales, rise in debt levels for builders and it was estimated that the cumulative debt of top eight listed companies was around Rs.40,000crore, which forced the Finance Minister P Chidambaram and Central Bank to announce advisory warnings to bankers and industry. A data of Liases Foras, a property research firm showed that by the end of September 2013, the unsold inventory was about 711 million Sq. Ft against the 670 million Sq. Ft. of the end of June 2013 and to clear this stock developers may need another three years.
In a recent report on dealing with construction-linked clearances by World Bank Doing Business for 2014 showed India position at 182nd place, which was the bottom-most. For an example, in Mumbai roughly around 48 approval are needed for any residential projects and developers were against the corruption involved in it and they supported Parekh regarding the same.
Lalit Kumar Jain, Chairman of Confederation of Real Estate Developers Associations of India (CREDAI) raised a question that why should a developed should approach several departments for no-objection certificates (NOC) and said the single-window clearance is solution for it and will reduce corruption and human contact. Earlier, he had opined that when the Real Estate Regulatory Bill is passed and executed, it cleanse the system. If the Bill controls the approval system, then it would reduce the time taken for approvals and the corruption associated with it as well as reduce the property price by as much as 25%.
Adding to approval system, Jain said that across many cities in the country, a developer generally needs to obtain more than 40 approvals at different stages, which involves 150 officials, which sometimes also causes delay in the completion of the project.
Niranjan Hiranandani, Managing Director of Hirananadani Group, one of the Mumbai’s major builders said that fifteen years ago, it used to take only six months to get all the approvals but now it takes 2-3 years, which basically adds financial burden on the developers.
In a recent report on dealing with construction-linked clearances by World Bank Doing Business for 2014 showed India position at 182nd place, which was the bottom-most. For an example, in Mumbai roughly around 48 approval are needed for any residential projects and developers were against the corruption involved in it and they supported Parekh regarding the same.
Lalit Kumar Jain, Chairman of Confederation of Real Estate Developers Associations of India (CREDAI) raised a question that why should a developed should approach several departments for no-objection certificates (NOC) and said the single-window clearance is solution for it and will reduce corruption and human contact. Earlier, he had opined that when the Real Estate Regulatory Bill is passed and executed, it cleanse the system. If the Bill controls the approval system, then it would reduce the time taken for approvals and the corruption associated with it as well as reduce the property price by as much as 25%.
Adding to approval system, Jain said that across many cities in the country, a developer generally needs to obtain more than 40 approvals at different stages, which involves 150 officials, which sometimes also causes delay in the completion of the project.
Niranjan Hiranandani, Managing Director of Hirananadani Group, one of the Mumbai’s major builders said that fifteen years ago, it used to take only six months to get all the approvals but now it takes 2-3 years, which basically adds financial burden on the developers.
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