Anuj Puri, Chairman and Country Head at JLL India.
To improve ‘ease of doing business’ in urban areas, the Government has been streamlining many procedures.
Developers have something to cheer about this Budget season. After years of demanding quick approvals for their projects and removal of red tape from government departments, the central government has been taking steps in the right direction to address these concerns.
A decision to streamline approvals and enable time-bound clearances for construction projects in urban areas by empowering urban local bodies to settle a wide range of approvals and adopting appropriate technology was taken in November. The central government aims to reduce movement of files between central government ministries and local government bodies, which prolongs the time to give approvals.
According to a report by the Confederation of Real Estate Developer’s Association, it takes up to three years to start a project after land is acquired, on an average. By this time, the cost of land rises by 24-30% due to hefty interest payments as bank loans are not available for procuring important raw material in this sector. This cost ultimately gets passed on to the customer. A simpler and uniform process will help bring down the cost of each unit in a project by 20-30%.
Progress achieved so far:
It will be interesting to see to what extent these new steps can cut down the overall approval process. In any case, the Union Government will have shown the way to State governments and urban local bodies to follow in its footsteps and simplify processes to further improve the ease of doing business in urban areas.