Real estate developers appeal for rational regulation

There is an urgent need to rationalise the rules and regulations governing the real estate sector. Large portion of the inconsistencies emerge from archiac laws, guidelines that conflict with the development agenda of the economy, disparity in incentives given to larger projects as against the same given to smaller projects.

Also, the current FDI norms also make it difficult for smaller developers to access capital easily. This echoed by Mr Navin Raheja, President of National Real Estate Developers' Council (NAREDCO). As an apex industry body that has a representation by the government and policy makers, NAREDCO is spearheading cause of a unified view on issues which are impacting the growth of the country.

While appreciating some of the steps taken by the government Navin Raheja mentioned that , "the Real Estate Regulation and Development BIll 2013 is a hugely positive step in this direction. But this can address the issues only in a limited way. The industry would be more than happy to coordinate with the government to iron out the inconsistencies prevalent in the system.

While the industry welcomes the positive intent of the government, we believe that the momentum gained should be utilised to iron out some of the issues. This will not only help to unlock projects worth over Rs. 10,000 crores, it will also catalyse the economy with more vigour and vibrancy."

Elaborating this further, Mr Sunil Mantri, Vice President of NAREDCO mentioned that, "environment clearances take a long time and hence escalate costs, the current regulations on foreign investment make it difficult for small developers to access low-cost capital. Currently the approvals of building plans by the planning authority or a municipal corporation result in abnormal delays.

These are the issues that can be easily managed by a little more imaginative thinking by the government and policy makers. As a sector, the builders and developers are accused of resorting to corrupt practices. As a sector, we believe that the germination of corruption occurs in prevalent systems and procedures."

Mr Sunil Mantri also appreciated the seriousness demonstrated by the government in promoting newer techniques and innovations in the construction sector. According to him, "our delegation's visit to Dubai next month under the leadership of Smt. Girija Vyas, Hon'ble Minister of Housing and Urban Poverty Alleviation, would help us understand the way we can streamline our rules and regulations.

It is critical that we understand this and work closely with the Government. A more efficient sector will impact many aspects of our economic growth.

Mr Mantri further added that " The objective of the tour is to study and explore the possibility of import of new construction technologies and foreign direct investments, including investments by NRIs, for speeding up construction and financing of housing and real estate projects in India, besides studying their Real Estate Regulation Act and Project Approval Procedures.

"Dubai has one of the fastest approving and decision making authority which gives clearance such as high rise, environment, heritage, and other clearances within the shortest possible time. A study and meeting will be done, as  to how we improve the clearances and bring in new systems in Indian approval methods which can bring down construction costs."

National Real Estate Development Council (NAREDCO) is an autonomous self-regulatory body under the aegis of Ministry of Housing and Urban Poverty Alleviation, Government of India.