DELHI-NCR: It takes 57 different approvals from the state and central government and visits to as many numbers of windows of different departments for a real estate project to shape up in Delhi-NCR.
Someone like you and me might approve of the lengthy process simply because we would want to avoid episodes like Noida Extension happening all over again. However, if the realtors are to go by, affordable houses may get 'more affordable' if the approval processes were simpler and uniform.
"The approval process that includes the No Objection Certificates (NoC) and licences, takes about two to three years to complete and if you get stuck at some point then there is no limit.
However, getting stuck is a different issue where the developer might have some problem in the project but in ideal conditions it takes a lot of time for a project to get through.
Should the process be simpler and uniform, the cost per unit in a real estate project would come down by 20-30 percent," says R K Arora, chairman and managing director, Supertech Group.
A Confederation of Real Estate Estate Developer's Association report also says that on an average it takes 2-3 years to start a project after the land is acquired; by this time the cost of land rises by 24 to 30 percent due to hefty interest payments as bank loans are not available for procuring important raw material in this sector. The cost of which ultimately gets passed on to the customer.
For instance, if you had booked a 1,150 sq ft 2 BHK flat at Rs 3,200 per sq ft in one of those swanky real estate projects in NCR you would have saved about Rs 1,10,400 or paid three EMIs lesser at standard home loan interest rates if the project had not been approved according to the present system.
To name a few, currently a realtor has to seek approvals from National Highway Authority of India, fire department, pollution department, ministry of environment, electricity department, Airports Authority of India, Ministry of Labour, Ministry of Mines, Central Ground Water Board, Directorate General Civial Aviation among many other sub-departments.
Dr Ranjeet Mehta, secretary, Housing Committee, PHD Chamber of Commerce and Industry offers, "In some states conversion of land also has to be done and NoC (No Objection Certificate) has to be taken as agricultural land needs to be converted for commercial use."
Several other developers rue the poor land acquisition laws in the country due to which most real estate projects get affected. "The Noida Extension issue where foul play by the authorities led to almost all stakeholders facing bad consequences was a result of the poor land acquisition laws that we have failed to change till date," says a developer who refuses to be named.
Many builders and developers have mulled a single window clearance system that would cut down the approval process to six-eight weeks.
"Ideally, we would prefer a single window clearance mechanism. This would help the real estate sector in many ways than one. We say this as a win-all method as the resultant costs will help us and the buyers as well," added R K Arora from Supertech.
Recently, the government has set up a committee to streamline the approval procedures for real estate projects in the country, a move that will help fast-track projects and cut cost overruns for builders and buyers too.
"The committee will study best practices from across the country and suggest a standardised procedure that can be adopted," said Arun Kumar Misra, secretary, Ministry of Housing and Urban poverty alleviation.
On several occasions many chambers of commerce such as the Ficci and several real estate association has suggested the formation a fast track process for single window clearances of real estate projects. However, little substantial has been done till date.
In 2011, 'Doing Business'-- a report by World Bank and International Finance Corporation, ranked India at 177 out of 183 countries with respect to dealing with construction permits.
In its 2012 edition, the same report ranked India 181 out of 183, which says sufficient about how the things are changing in India, thereby, hampering the whole real estate environment in India.
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