Takeaways Galore

The mega annual feature of the real estate industry excelled itself this year in terms of its sheer scale and accomplishments. The two-day Credai Conclave 2015 organised by the Confederation of Real Estate Developers’ Associations of India held in the national Capital on December 16 and 17, besides having the presence of almost everyone who mattersin the industry, witnessed two prominent Chief Ministers and two Union Ministers gracing the prestigious event. The industry got an opportunity to highlight concerns over the much-delayed single-window clearances, double taxation menace and some aspects of the proposed regulatory authority, and it also procured positive assurances from representatives of the political class present at the conclave.

While Gujarat Chief Minister Anandiben Patel and her Haryana counterpart Manohar Lal Khattar agreed to consider the real estate sector’s demand for keeping ongoing projects out of the purview of the proposed Real Estate Regulatory Authority (RERA), a significant announcement came in the letter of Uttar Pradesh Chief Minister Akhilesh Yadav to the Prime Minister, which was presented at the conclave. In the letter, Yadav expressed his Governments’ intent to develop international airports in Jewar, Greater Noida, and Hiran village, Firozabad, to promote tourism in Agra and requested the PM for faster clearance of the projects.

The flagship summit, themed ‘Clean India-Skilled India-Strong India’, kicked off at Hotel Taj Palace in New Delhi on December 16. The opening day witnessed the participation of Minister for Skill Development and Entrepreneurship Rajiv Pratap Rudy and Minister for Labour and Employment Bandaru Dattatreya, besides Patel, the Chief Minister from Gujarat.

At the outset, Patel appreciated Credai’s role in organising theconclave which brought the Government and real estate sector together. Credai’s concern on the need for not implementing RERA on ongoing projects was acknowledged and agreed upon by her. She also highlighted the land reforms carried out by the Government in Gujarat taking into account the issues faced by the real estate sector.

Speaking on the concluding day, Khattar came out with the announcement that the Haryana Government had agreed to consider the sector’s demand for keeping ongoing projects in the state out of RERA purview. Inaddition, the Haryana Chief Minister also agreed to look into the demand for providing a single-window clearance for upcoming projects across the state. Khattar mentioned that Haryana has lot of scope for real estate development considering the location advantage which it enjoys. The Haryana Government, he said, had proposed the construction of an international airport between Kurukshetra and Karnal in order to boost industry in the state.

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Flagging off the real estate industry’ pressing concerns, Getamber Anand, President of Credai National, said, “A single-window clearance system is required to reduce the time and cost involved in navigating the complex web of permissions between various departments. This accounts for 25 per cent of the cost paid by the buyers. “Anand said that duplication of taxes levied through ESI and BOCW should also be removed.

“We request both the Central and state governments to ensure that judgments by any High Court should be considered valid across the country. This will not only save time and effort for the developers but also benefit the end-consumer,” he added. The Credai chief stressed the fact that the real estate sector contributes 7 per cent to the GDP of the country and is the driving force for the ‘Make in India’ initiative. “Since we propel demand in the manufacturing sector of multiple ancillary industries, we must be granted industry status”, he summed up.

Rohit Raj Modi, Vice-President, Credai National, said, “Regulatory environment needs to be altered to promote real estate in the country. Ease of Doing Business is an index coming out of the World Bank. India stands at 186 in the ranking of 189 economies on the Ease of Doing Business. Under construction sector we have moved up only one position since the 35 per cent of the weighted average on which EODB index is calculated, is construction permissions. If fringe expenses are cut down for developers, the sector will get a boost as benefits will be passed on to the customer”.

During deliberations at the conclave, the Real Estate(Regulation and Development)Bill, 2015, and its implications were discussed at length. The consensus was that ongoing projects should be kept out of the purview of the new Bill as the registration of such projects would delay their completion. Credai made a submission to the Government to keep commercial real estate out of the influence of the regulator. It also specified the need for including sanctioning authorities in the Bill to ensure developers are not penalised for delay in approvals such as plinth certificates, occupancy certificate, electricity and water connections, even after the project has taken off.

Without these permissions, even a completed project cannot be offered for possession to homebuyers, which impacts the delivery timelines. Due to these delays, the property costs keeps adding up on a regular basis affecting both the buyer as well as the developer. The conclave also saw discussions on the proposed Goods & Services Tax(GST) and its impact on the real estate sector.

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A report by KPMG on the multi-fold impact of the proposed GST regime on the real estate sector and property buyers and the need for corrective steps was also presented during the conclave. With the central theme of ‘Clean India-Skilled India-Strong India’, the Credai Conclave 2015 also saw the release of the Credai – Jones Lang LaSalle(JLL) white paper on smart cities. The paper spoke about the opportunity to transform Indian cities into global destinations. It showcased how real estate sector will playa major role in smart city development and ‘Housing for All by 2022′.The paper shared brief comprehensions on strategy for smart city development, section and funding of smart cities, implementation by PPP, foreign countries’ interest in development of smart cities in India and real estate development.

Keeping in view the shortage of skilled manpower in the construction sector, Credai has started skilling of construction workers under the Pradhan Mantri Kaushal Vikas Yojana (PMKW) in partnership with the Construction Skill Development Council of India (CSDCI). Under the scheme, Credai aims to train over 2,000 construction workers by the next quarter across concerned Credai state and city chapters. All workers who successfully undergo this training will be given certificates by CSDCI. As a logical next step in this partnership, Credai will ensure that at least 20 per cent of the labour employed in various construction projects by each of its members are certified by CSDCI. A MoU to this effect was signed on the opening day of the conclave between Getamber Anand and Col. Ashwani Kumar Joshi, CEO, CSDCI.

The very first edition of Credai CSR Awards across 12 categories was held at the conclave to honour the efforts of real estate sector towards social causes. Credai also announced the formation of a Credai Educational Scholarship Fund (CESF) which has been seeded by initial contribution of Rs.25 crore by developers all over the country.

Sanjaya Gupta, MD, Punjab National Bank Housing Finance Ltd., was felicitated in recognition of his company’s contribution to CSR activities. Rana Kapoor, Founder, MD & CEO, YES Bank, was also felicitated for his exemplary contribution to infrastructure, smart urbanisation and affordable housing.

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