New Delhi: Slow clearances are one of the major reasons for delays in completing real estate projects in the National Capital Region, developers say, as the sector continues to face a downturn.
The central government this year passed the Real Estate (Regulation and Development) Act, 2016 (RERA) which ensures transparency by builders with stringent provision for compensation in case of delays, but lacks a strong measure to force authorities to deliver time-bound approvals.
“Definitely the biggest problem in real estate today is the approvals. We have to take nearly 50 Non Objection Certificates (NOCs) for one project approval and just one NOC takes 4-6 months. Projects get stuck for 1-2 years due to approvals,” Supertech chairman R.C. Arora said.
The developers have pointed out that RERA involves developers and buyers but not the approving authority.
“Single Window Clearance should have been the top most priority in the bill which has not been taken care of,” says Executive director of an online real estate services provider.
Supertech’s 100-acre township project ‘Upcountry’ on Yamuna Expressway has been in regulatory cross hairs after the Yamuna Expressway Industrial Development Authority cancelled the an earlier clearance, just a few months before completion.
A Knight Frank India report released on 4 July said that new launches in the NCR have been in decline since 2010 and have dropped by more than half over the last six years.
“The day single window clearance comes, I hopefully think that the overall problem would get solved,” Kapoor added citing the Supertech project to illustrate the problem of regulatory hurdles.
In an annual conference on the real estate sector organised by Confederation of Indian Industry at New Delhi on Wednesday, developers voiced their concerns regarding the approval process.
“The draft of the Model building bye laws have been announced by the government…unless the bye laws are notified and the states are instructed to follow them, the time taken for getting permission, which is maybe a year and a half, will not come down,” said Getambar Anand, chairman, ATS Group.
Government representatives acknowledged the industry concerns and promised to address the problems of clearance in the rules to be notified by states.
“We need to work much more on several issues. One is single window clearances. At an average we cannot have builders wait for 3 years to start a project. It pushes up the cost. We need to get a way to get a project up in 6-8 months,” Sriram Kalyanaraman, chief executive officer of National Housing Bank said.
He said that some of the states are very actively looking at the single window clearance referring to Telangana, Haryana and Madya Pradesh who have taken several initiatives on this front.
“I think there are number of concerns that the industry have…I can take back to the standing committee some of these concerns this time around and flag them in our recommendations going forward,” said Pinaki Mishra, MP and chairman of the Parliamentary Standing Committee on Urban Development, adding that urban local bodies’ permission mechanism certainly has to be looked at.
Credits Live Mint