29th Mar 2013
Govt. plans major overhaul of the realty sector
The real estate market in urban centres like Noida, Gurgaon, Pune and others is in a mess with developers battling a mammoth body of clearances and a system plagued by corruption. These systemic problems don't just affect consumers but lead to unaffordability as well because of a severe demand-supply gap. Now, all this could soon change as Ajay Maken-led ministry of housing and urban poverty alleviation plans major shake-up of the sector based on key recommendations of the Dhanendra Kumar Committee report. The Committee was set up in mid-2012 by the ministry with a mandate to streamline approval for real estate projects and suggest a methodology for fast-tracking clearances. Mail Today managed to access a part of the report, which suggests a major overhaul of the sector. Some of its key recommendations are already at an 'advanced' stage of implementation and likely to be announced soon. Some others, including setting up of a IT-based, single-window clearance system for proposals like a single-unified form to be put up at local municipality Websites, are being discussed.
The report had pointed out the 'sad' state of affairs when it comes to construction-related clearances with India ranking a sorry 182nd out of 185 countries. Further, with around 34 clearance procedures starting from the local municipality to the top, the average minimum time for approving a project is about 196 days. "We want a setup where all this happens between 30-60 days. We are looking at setting up time-bound clearance deadlines for every authority. This way, at least, the applicant will have clarity," Maken told Mail Today. Of the two key 'clearance issues' at the Central government level, the ministry has already resolved one in line with the Committee's findings. Currently, any new project has to get location clearance from the civil aviation ministry-whether it lies in the designated 'funnel zone', where construction is not permissible.
"The ministry has raised this issue with the civil aviation ministry, which has agreed to digitise their entire 'funnel' records and put them up in the public domain," a senior official in the ministry said. The ministry of environment and forests also plays a big role in clearing projects. "It has been suggested that the environment ministry should automatically clear projects that obtain green certification from recognised rating systems," a senior official said adding that deliberations between the two ministries are going on. The ministry is also working on a plan to set up a nodal agency within the next three months to give quick clearance to affordable housing projects. The ministry is also working on key suggestions that will directly empower the consumer- uploading a list of all approved projects on Websites of local municipalities; advertisements about approval granted to builders; and online information about status of applications. "We have citizens at the center of all our efforts. Once the sectoral growth is spurred by improving transparency and clarity, the issue of affordable housing will also be addressed. The aim is to ensure people can afford a decent home," Maken said.