Positive Changes in the Offing

In the light of the shift in power at the Centre, RAJENDRA VARMA talks about the boost in confidence and hope for the construction and infrastructure industry. The decisive change of government has instilled a lot of confidence in corporate, business owners and real estate companies. That said, our organisation is preparing to make long term investment commitments as the government is perceived to be business-friendly. In our opinion, a stable regulatory regime and a pro-business government will boost investors´ as well as buyers´ confidence. This in turn will enable us to increase our scale of projects from large layouts to mini townships and speed up the pace of project completion. Immediate changes There is an express need for the approval process to be streamlined and expedited. Easy approvals will lead to faster clearances, resulting in steady supply in the market, which will keep property prices affordable. In view of the ´achhe din´ ahead, we hope policies to be eased and approvals to have single window for redevelopment. In fact, the single window clearance will ease internal organisational processes and speed things up. In this regard, the government has already started the initiative for better governance with the implementation of new reforms such as the Real Estate Bill, which will regularise the functioning of the real estate sector. The digitising of public and land documents such as 7/12 forms and making these available online is a step forward and will not only improve transparency but also promote faster approvals for land transactions. The Regulatory Bill implementation will make processes uniform for everyone, without any ambiguity or discretionary approvals. Backing up with budget The Union Budget has provided a fillip to the sector by proposing changes in the Foreign Direct Investment (FDI) norms, which augur well and should encourage long term capital providers to invest. For developers, FDI backed with lower interest rates will help ease cash flow, lower cost of funds and thus drive the prices down. The Real Estate Investment Trust (REIT) is another established avenue that allow for more professional investments and management in the sector. It will allow developers sitting on assets to both unlock assessment and generate liquidity. The relaxation of Floor Space Index (FSI) norms is another positive development and will be a major catalyst for us for more purchases of raw land for development. Opening up of land parcels in Mumbai, namely port trust, salt pan and railway land, will further unlock a plethora of opportunities, which will drive down prices. Thus, velocity of sales will increase and push unsold inventory stock. Real estate is one of the largest employment generating sectors in the country and influences the performance of allied industries. In spite of this, the real estate sector in India does not enjoy industry status and is bereft of subsequent benefits. By granting it industry status, the government will allow the sector to access debt lending at superior interest rates and reduced confirmatory values. We definitely expect the government to be more developer-friendly and look forward to fast-tracked reform measures in the environmental approval process and clear policies on real estate. We believe the concept of ´achhe din´ will improve the overall market sentiments and developers like us will actively take up more projects. About the Author: Rajendra Varma, Director, Omkar Realtors & Developers Pvt Ltd,? ?has over 15 years of experience in ?the ?real estate and infrastructure? sectors?. His in-depth knowledge and experience, backed with a flair for new technology, has enabled Omkar to engage and adopt the latest and innovative solutions on the technical front.