The Confederation of Real Estate Developers’ Association of India (CREDAI) Friday urged the central government to introduce single window clearance and a uniform tax structure for the sector across the country. The apex forum of developers will submit the comprehensive checklist for good governance to Urban Development Minister Kamal Nath at its conclave NATCON at Singapore April 28.
‘The minister has promised that once we submit the documents, he will hold consultations with the states,’ CREDAI national president Lalit Kumar Jain told reporters in Hyderabad. He said various committees of CREDAI were collating information about approval processes, compliance issues and best practices in various states and cities to prepare the comprehensive checklist.
Jain hoped that with the comprehensive check list, an approval for a project would be possible in three weeks. The real estate sector at present needs approvals from 40 different agencies like environment, airports authority and police and the process takes anywhere between one year to one and a half years.
‘The single window clearance can help reduce the project cost by 10 to 25 percent in the larger interest of the consumers,’ he said. He pointed out that 32 to 36 percent of construction cost goes into various taxes and called for introducing uniform tax or rationalisation of taxes to make affordable housing a reality.
‘The developer community is the victim of the system and not the beneficiary,’ Jain said while pointing out that completion of a project from land bank to construction is taking three years, hitting hard the developers in this capital-intensive business.
CREDAI also called for modifications in the proposed Model Real Estate Regulatory Authority Bill to bring under it all stakeholders like licensing authorities, consumers, financiers and the developers. ‘The bill only talks of jail and punishment in the garb of consumer protection,’ he said, terming the government approach impractical.
Underlining the need for restructuring, Jain said 80 percent of funding happens to only five percent of developers. He claimed that there were minimal NPAs (non-performing assets) in real estate sector.
Jain said after the slowdown and upswing till August last year, the sector was currently in stabilising phase. He termed the market as ‘robust’. ‘There is huge demand with the housing shortage being put at 27.4 million units,’ he said.
With rapid urbanisation, there is a huge demand in tier-II cities like Hyderabad, Bangalore, Pune and Chandigarh, he said.
