How to make housing affordable is a big question. But if the centre and state are thinking in terms of providing housing to the poor and needy a lot of rules and regulations must be simplified for both builders and also the buyers.
Currently, it takes nearly two to three years for a developer to commence construction after having entered into an agreement for land purchase. The real estate developers today are required to pass the approvals through 150 tables in about 40 departments of central and state governments and municipal Corporations. Every day delay means – it is a drain on profitability for the developers.
There must be transparent digital online approval process taking only minimum time for approval and putting an end to unethical practices. Digital approval mechanism, better co-ordination among the multiple authorities in dealing with various permissions/approvals will encourage private real estate developers to invest in the affordable housing segment.
States can be asked to frame by -laws in a transparent manner for every division / region of a city and bring out checklist for approval compliance and the approval process shall be made online thus eliminating intermediaries, avoidable unethical payments and expenditure. Stricter penal provisions shall be clamped within a time limit of 10 years for any wrong reporting /compliance if it comes to notice in future.
Availability of land with infrastructure like Road, water and sewerage is a big drag for private developers. It will be appreciated that providing infrastructure like road water and sewerage is the obligation of the state and may have to be met out of the Cess and tax collected from the project. If the State can take care of this arena, there shall be more private players evincing interest to take up the projects.
We need measures similar to one brought in 2000 by the then PM Shri Vajpayee ji by introducing Section 80 IB (10) of the Income Tax Act which aimed at promoting constructions of housing projects. We can undoubtedly say that this was a break through provision introduced bringing in a big real estate revolution particularly in augmenting the housing supply.
The years 2000-2004 was the turnaround period in the real estate sector and in housing supply – with large number of private players entering and augmenting the housing stock/housing supply. But this good progress with increased housing supply was short lived. The subsequent Government brought in MAT. This move by the next Government dis-incentivized many of the players and again there was dip in housing supply.
Both PM Modi and KCR the Chief Minister of Telangana are thinking in terms of providing housing to the majority of population. Lets hope they will achieve the targets.
