CREDAI appeals for high power realty committee for major projects

Citing the inordinate delay in obtaining approvals for projects that is stalling growth of the real estate sector and also the economy of the country, Lalit Kumar Jain, Chairman CREDAI and CMD, Kumar Urban development Ltd, urged the Union Government to form a high power realty committee to accelerate big ticket realty projects worth between Rs.200 Cr and Rs.1000 Cr.

Real estate projects with investments above Rs. 1000 Cr. have been routinely facing inordinate delay in securing approvals. This hurdle has been created by the Central Government's directive which makes it mandatory for all developers to obtain an environment clearance certificate before launching projects.

Jain said the government could appoint a high level committee for realty sector on the lines of the Steering Committee for infrastructure projects worth over Rs 1,000.

He pointed out that the delay in obtaining environment clearance for big ticket real estate projects has become a major deterrent for developers. For instance, in Maharashtra alone, more than 1,200 proposals with an estimated investment of over Rs. 1 lakh crore are stuck in EIA (Environmental Impact Assessment) clearance.

"Although the Government has issued a circular to clear such projects in a time bound manner, it is taking more than 17-18 months to obtain approvals. This delay not only affects the real estate market but also the GDP of the country. Government's own data shows that real estate contributes 6.3% to GDP," he said.

Jain said that many real estate projects are stuck for the want of clarity or SOP (Standard Operating Procedure). For instance, a high rise committee has been absent in Pune for last one year. Similar issues exist across the country.

CREDAI had earlier submitted a workable plan to the state government to initiate realty reforms like single window clearance and online approvals. Online approvals and single window clearances will significantly reduce the housing cost as the approvals will be faster. It will also reduce red-tapism, which has been a huge obstacle to clear approvals on time.

A high power committee meant exclusively to expedite real estate projects will also help in bringing about much-needed transparency in the industry. Jain explained that all four pillars of democracy need to work in tandem to generate efficiency in the system and promote economic growth.

Jain urged that the government should plead with courts not to obstruct growth under the garb of non transparent practices, but provide guidelines that will create SOP to develop an efficient and transparent system. If this would have been the objective in steel, coal, 2G and sand mining, then India's economic story would be different.