By: Anshul Jain, CEO, DTZ India
Track2Realty Exclusive: With the number of approval-oriented steps adding up to more than 50, the process can stretch over a year and a half to two years. A system that is so obviously fraught with hurdles and red tape will naturally deter potential builders of integrity.
It also provides fodder to those with the money and connections needed to bypass it. So excessive regulation, in effect, kills true developmental zeal while spawning malpractices and unethical behaviour.
In the light of this scenario, the proposal of the Draft Real Estate (Regulation & Development) Bill 2011, to establish a Real Estate Regulatory Authority to oversee all real estate projects, should be viewed with caution. Its intent – to introduce transparency and accountability into a system that currently lacks it – is good, but it may only layer more approval processes on top of an already long list without getting us closer to the ultimate goal of protecting the end consumers.
A regulator will only be effective in solving the problem, if and only if structural changes to land acquisition and the construction approval process is brought about.
In other words, simplify acquisition laws and increase transparency in development norms – the reduction in the policy oriented entry barrier will make it easy for entrepreneurs to enter the sector and become a developer – the increased competition will help in reducing prices.
The regulatory norms should be aimed at protecting environment, encouraging safety, adherence to the master plan and density norms, and protecting consumers on quality and timelines.
The solution, I am convinced, lies not in the direction of more regulation but in deregulation. We have to clear the road to smoother delivery for a builder by drastically reducing the number of approval-related steps involved from the time the project is launched to when it is completed.
…to be continued
