Ease of business: ‘Simplified rules could bring down project cost by up to 30%’https://indianexpress.com/article/business/budget/ease-of-business-simplified-rules-could-bring-down-project-cost-by-up-to-30/

Ease of business: ‘Simplified rules could bring down project cost by up to 30%’

The Centre aims to reduce movement of files between Central government ministries and local government bodies, which prolong the time to give approvals.

Developers have something to cheer about this Budget season. After years of demanding quick approvals for their projects and removal of red tape from government departments, the Centre has been taking steps in the right direction to address these concerns.

A decision to streamline approvals and enable time-bound clearances for construction projects in urban areas by empowering urban local bodies to settle a wide range of approvals and adopting appropriate technology was taken in November. The Centre aims to reduce movement of files between Central government ministries and local government bodies, which prolong the time to give approvals.

According to a report by the Confederation of Real Estate Developers’ Associations, on an average, it takes up to three years to start a project after land is acquired. Due to this delay, the cost of land rises by 24-30 per cent due to hefty interest payments as bank loans are not available for procuring important raw material in this sector. This cost ultimately gets passed on to the customer. A simpler and uniform process will help bring down the cost of each unit in a project by 20-30 per cent.

Progress achieved so far

In association with Indian Space Research Organisation, the Ministry of Culture is developing colour-coded maps for 281 monuments that account for most of the construction-related approvals, using which municipal bodies can accord approvals in quick time.

> The Ministry of Environment, Forests & Climate Change has come out with revised and simplified environmental norms, and these will be notified at the earliest after consultations with the Ministry of Urban Development. Urban local bodies and states will be empowered to give approvals at their level, based on their willingness and ability.

> The Ministry of Urban Development will soon issue Model Building Byelaws incorporating all revised and simplified norms and processes enabling urban local bodies to approve building plans in quick time.

> The Ministry of Civil Aviation has reported that applications received by the Airports Authority of India for height clearances in airport zones have come down by over 200 per month further to development of Colour Coded Zonal Maps (CCZMs) for 12 airports that account for 58 per cent of total such applications and making them available to respective urban local bodies. CCZMs to be developed for another 28 defence airports that are used for civilian purposes also, to bring them in line with what is being done for civilian airports. The Ministry of Civil Aviation also commissioned improved version of online NOCAS — No Objection Certificate Application System — eliminating human interface and enabling faster issue of NOC through automatic calculations of permissible heights in airport zones with applicants being able to track the status.

> The Ministry of Culture has come out with a mobile-based app that enables online approvals for construction in the vicinity of monuments in just 72 hours through integration of websites of National Monument Authority and those of respective urban local bodies. The time taken at present is about 90 days.

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It will be interesting to see to what extent these new steps can cut down the overall approval process. In any case, the Union Government will have to show the way to state governments and urban local bodies to follow in its footsteps and simplify processes to further improve the ease of doing business in urban areas.