Government responsible for high prices of homes: CREDAI

06 Apr 2018 CW Team

CREDAI requests housing ministry to initiate steps to enhance India’s standing in granting construction approvals.
Urges government to provide appropriate means for land financing to build houses under the affordable housing segment.

In a letter addressed to Hardeep Puri, Minister, Ministry of Housing and Urban Affairs, real estate body CREDAI has requested the Housing Ministry to initiate certain amendments – led by the implementation of the single window clearance mechanism – in the Indian real estate sector. CREDAI expressed their concerns over the lack of ease of attaining construction approvals from the government authorities which is causing a negative impact on project costs and delivery, making the government authorities responsible for the same. This notion is further backed by India’s appalling rank of 181 out of 190 nations in the ‘Dealing with Construction Permits’ category in The World Bank’s ‘Ease of Doing Business’ report.

CREDAI has repeatedly urged the government authorities to address other pressing issues, which includes reducing the high GST rate of 12 per cent on all homes purchased and not only those under CLSS as well as providing appropriate means for land financing to build houses under the affordable housing segment. CREDAI believes that despite the segment being granted the 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 and no advantages of the same are being offered to the developers of the segment. A credible reform such as adoption of the environmental norms in the local building bye-laws of respective states or development authorities has also been stuck in legal imbroglio after the NGT passed certain observations on the amendment made by the concerned ministry.

CREDAI has also urged concerned officials to remove bottlenecks to make the industry more efficient and systematic. With the real estate industry being one of the most important and largest contributors to the Indian economy, CREDAI believes it is absolutely imperative for these concerns to be addressed at the earliest.

CREDAI National President Jaxay Shah, commented, “Currently, there are a 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 humbly 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 25-40 per cent.”

CREDAI requests housing ministry to initiate steps to enhance India’s standing in granting construction approvals. Urges government to provide appropriate means for land financing to build houses under the affordable housing segment. In a letter addressed to Hardeep Puri, Minister, Ministry of Housing and Urban Affairs, real estate body CREDAI has requested the Housing Ministry to initiate certain amendments – led by the implementation of the single window clearance mechanism – in the Indian real estate sector. CREDAI expressed their concerns over the lack of ease of attaining construction approvals from the government authorities which is causing a negative impact on project costs and delivery, making the government authorities responsible for the same. This notion is further backed by India’s appalling rank of 181 out of 190 nations in the ‘Dealing with Construction Permits’ category in The World Bank’s ‘Ease of Doing Business’ report. CREDAI has repeatedly urged the government authorities to address other pressing issues, which includes reducing the high GST rate of 12 per cent on all homes purchased and not only those under CLSS as well as providing appropriate means for land financing to build houses under the affordable housing segment. CREDAI believes that despite the segment being granted the 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 and no advantages of the same are being offered to the developers of the segment. A credible reform such as adoption of the environmental norms in the local building bye-laws of respective states or development authorities has also been stuck in legal imbroglio after the NGT passed certain observations on the amendment made by the concerned ministry. CREDAI has also urged concerned officials to remove bottlenecks to make the industry more efficient and systematic. With the real estate industry being one of the most important and largest contributors to the Indian economy, CREDAI believes it is absolutely imperative for these concerns to be addressed at the earliest. CREDAI National President Jaxay Shah, commented, “Currently, there are a 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 humbly 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 25-40 per cent.”