There is no real gloom in the real estate industry. The industry is just used to a greater boom. And having seen this atmosphere of boom,anything that is not boom,looks like gloom.
This is how Union Urban Development Minister Kamal Nath described the real estate situation at a meeting with private real estate industry leaders here on Thursday. Highlighting the stumbling blocks in the path of development and transparency,Nath said that even though the Indian scenario was not comparable to developed countries due to land issues and an extremely low average floor area ratio (FAR),the picture was far from gloomy.
However,he slammed Delhis Master Plan 2021 once again,stating that land has to be used efficiently and monetised properly due to the peculiar situation that India finds itself in.
Even though the Indian construction industry is the ninth largest in the world,there is a huge gap between the demand and availability of land. The global FAR average is greater than what we can afford in India,in turn pushing up the cost of land, Nath said while inaugurating the 2011 Conclave of the Confederation of Real Estate Development Association of India (CREDAI).
The FAR in India has to be based on certain ground realities,the minister said. We have to ensure that whatever FAR area we are left with has the carrying capacity to absorb a higher number of dwelling units. Thats the problem with the Delhi Master Plan as well… it is far removed from reality, Nath said.
Asking the government to reform the current process of getting project plans approved through multiple state and Central government agencies,which push up the time and cost for any urban space development project,CREDAI president Lalit Jain presented the Draft Model Building and Development Plan Approval (Single Window Clearance) Act to ministers present at the conclave. Our humble request to the government is to use our Draft Act as a basic document to initiate a consultative process with all departments concerned of the Central and State governments,and further refine it. The developer community will participate in the slum rehabilitation programme in a big way across the country,and eradicate slums by giving quality accommodation to those who are living in slums, Jain said.
Minister for Housing and Urban Poverty Alleviation Kumari Selja said the real estate sector has not been able to perform to its potential due to lack of transparency. The realty sector contributes to 10 per cent of the countrys GDP. But lack of transparency has brought about an air of mistrust among the customers,which has adversely affected the sector. The government is working towards introducing a regulatory act for Single Window Clearance. The regulatory bill will help streamlining the sector,which will result in better affordability and increase investors confidence, Selja said
Nath urged the private sector to work in tandem with the government to achieve desired targets. We are setting up an Urban Regulatory Authority in Delhi to bring about the Urban Regulatory Bill. The government will act as a catalyst for bringing in the regulatory Act. The private sector also needs to take an initiative, he said.