By: Anshul Jain, CEO, DTZ India
Track2Realty Exclusive: The image of the tall crane or earth moving equipment standing amid construction rubble is a ubiquitous one across our cities. In projects involving malls, housing complexes and tech parks, the visual signals are strong and clear: real estate is booming in India.
The sector is currently the second largest employer after agriculture. Its present contribution of 5% to national GDP is expected to go up to 6% in the next 5 years. It is also one of the most profitable sectors in the country today.
Interestingly though, for a sector that shows so much promise, the outlook is not entirely sunny. The image of real estate developers is shaky, marred by incidents of fraud and a failure to deliver on promises in several instances.
The general perception is that developers will stop at nothing in order to make a profit. The complexity and seeming murkiness of the system drive away many would-be developers who have the credentials and ideas to enhance the country’s growth story.
It is time to take a step back and study the root cause of some of these problems. Currently, regulation has a stranglehold on the sector and its players. Just entering the sector as a developer involves a series of legalities. When it comes to land acquisition and use, another set of licenses and clearances come into play.
A typical construction project may involve scores of approvals from different government departments including but not limited to environmental clearance, building plan approval, fire clearance, permission for temporary water and power connection, followed by permanent water and power, license to build, completion certificate, occupancy certificate – and this is, by no means, a comprehensive list.
…to be continued
