‘Infrastructure status to housing sector need of hour’ : The Tribune India

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‘Infrastructure status to housing sector need of hour’

Rajeev Talwar, Chairman, National Real Estate Development Council (NAREDCO), says a critical piece missing in the entire chain of reforms is infrastructure status to the housing sector, which is much needed for large-scale urban infrastructure projects.

‘Infrastructure status to housing sector need of  hour’

Rajeev TalwarChairman, NAREDCO



Rajeev Talwar Chairman, NAREDCO talks to Sanjeev Sharma

Rajeev Talwar, Chairman, National Real Estate Development Council (NAREDCO), says a critical piece missing in the entire chain of reforms is infrastructure status to the housing sector, which is much needed for large-scale urban infrastructure projects.

Q: The government has set an ambitious target to provide housing to all by 2022. What is your view?

A: The government's resolve to provide housing to all by 2022 is extremely important to address rapid growth in slums and unauthorised colonies, thereby paving the way for a better quality of life for the country’s citizens. It is a bold target but it can surely be achieved, provided hindrances are removed to usher in mega construction and renovation across the nation. It is critical to review the current state, identify issues restricting desired growth of housing stock and then build an effective execution strategy. According to studies conducted by the Ministry of Rural Development and the Ministry of Housing and Urban Poverty Alleviation, almost a quarter of Indian households lack adequate housing and India will require about 11 crore housing units on a pan-India basis by 2022. That surely is a humongous task.

Q: How do you see the current pace of reforms in the sector?

A: We need to strengthen the sector by streamlining the archaic norms and procedures of urban local bodies and incentivise stakeholders. In the past few years, there have been reforms across a wide series of real estate issues such as land acquisition, regulation to protect customer interests, opening the doors to foreign investors, and the introduction of Real Estate Investments Trusts (REITs). There are still a number of issues that need focused attention, failing which the real estate sector will not be able to deliver the promise it holds.

Q: In the past few years, we have seen quite a few builders who have faced ire of home buyers over delay in possession and quality of construction and this has dented builders’ credibility to a large extent. The sector has also been impacted by slowdown in demand. How do you intend to address these critical issues?

A: I don't think we should blame anyone as a single authority or single agency which causes delay. The best way out should be the way forward, that no sale of apartments is allowed till the shell is complete. Let the buyer see what he is going to buy, let the buyer see what is the product which is going to be finished and that is the best guarantee for any buyer and to safeguard his interest. Also, the passage of Real Estate Regulatory Bill is set to give facelift to certain aspects in India’s real estate sector specially at a time when it is suffering from a slowdown. It will also ensure that fly-by-night operators and land grabbers/speculators are sieved out, in more regimented way than ever before. Consequently, this will catalyze competitive bidding for limited supply of land and this will automatically check land prices. It is expected that there will be timely completion of projects thereby escalating supply of homes to buyers and investors.

Q: What are the additional reforms you think are needed to give push to the housing sector?

A: There are some key issues that merit attention. For instance, India’s FAR/FSI norms are much lower compared to international cities resulting in horizontal expansion of cities and thus putting pressure on limited supply of urban land. The density norms in India are also not adequate to facilitate economical development of Community Service Providers (CSP)/Economically Weaker Section (EWS) houses. There is an urgent need to relook at the existing development norms, especially from CSP/EWS housing perspective. Further, additional development norms such as internal roads and parking space could be relooked at, and if possible, relaxed for affordable housing to facilitate movement of available land parcels towards development of increased housing.

Q: Do you think PPP model can play an important role?

A: PPPs can surely help bridge the gap between the housing need and supply, as they can attract private capital for financially viable affordable housing projects. The PPP framework can be effectively used to address issues in housing development such as land availability, approval delays, funding, and affordability. But first, government must accept that PPP is a partnership fraught with risks; and not a contract that is given out to squeeze the private player.

Q: How will the passage of Real Estate Regulatory Bill help?

A: The passage of the Bill is indeed a positive for the sector as the regulatory body will usher in much-needed transparency in the sector.

It will help address a number of issues plaguing the sector and bring clarity for both developers and buyers. I believe once state wise regulators are in place, the real estate sector will get a much-needed boost and give a bigger momentum to sales. While the new law answers homebuyers' concerns, including delayed delivery and change in project layout, developers too will benefit as higher transparency and accountability will improve fund flow from banks and other institutional investors into the sector.

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