Revive Realty to Rejuvenate Economy

• CREDAI to PM - need widespread realty reforms
• Says Real Estate supports 250 industries, creates massive employment, contributes 11% to GDP
• Calls for end to policy paralysis, presents 10-point agenda
• Targets Housing Surplus India 

NEW DELHI: Pointing out that real estate development can revive the sagging economy, developers’ apex body CREDAI has called for launching a mission to make India Housing Surplus from the current status of a housing deficit nation by 2020.
Real Estate supports 250 industries, generates employment and contributes 11% to GDP, CREDAI national President Mr. Lalit Kumar Jain said a statement today..

Mr Lalit Kumar Jain (centre) flanked by Mr Pradeep Jain, Chairman - Credai
and Mr Shekhar Reddy of CREDAI-HYderabad Chapter

CREDAI also has written an open letter to the Prime Minister and set an 10-point agenda of action for taking the nation on an accelerated growth path while solving the housing problem faced by millions of people across the country.
Pointing out that the economic liberalisation initiated by Prime Minister Dr Manmohan Singh as the finance Minister in 1990 have not covered the real estate sector, CREDAI called for comprehensive reforms for the sector covering land, administration, banking and tax.

CREDAI reiterated its long standing demand for a Single Window clearance system and pointed out that McKinsey has said in its report to the Government of India that delays in approval processes alone increase sale value of houses by 40%. Delays due to multi clearances/approvals numbering over 40 by various Agencies/Departments of the Government - the average time being 18 months – are the order of the day though most of the Departments have the same series of check lists. This obviously leads to duplication of submission by architects. In fact, the number of building plans sanctioned over the past ten to fifteen months has drastically come down.
The only way forward for a clean and cost effective housing sector is an e-based standardization of single window approval process. CREDAI has submitted a Single Window Act for consideration to Ministry of Housing (HUPA) and Ministry of Urban Development. However, there has been no progress at all, Mr Jain said.
Presenting CREDAI case for close coordination among various government departments, he said the various Central and State Government Departments are issuing directives in isolation. For instance, the Environment Ministry issued Building Approval guidelines authorising its Committees to link the height of a building to its distance from a Fire Station, though the Ministry is neither the technical nor the administrative head of Fire Safety issues! Such arbitrary exercise of power by MoEF has crippled the sector due to approval delays, adding to costs.
“Sir, we developers are entrepreneurs, conducting our business to the best our ability. We too hate the system that labels us as crooks, cheats and breeders of black money. Few people seem to realise that we are victims of the system and not beneficiaries or generators of black money for that matter,” he said in the open letter to PM.
He pointed out that developers are forced to deal with 140 officials at various stages to obtain 40 plus clearances and history is witness to the fact that corruption creeps in wherever there is a human interface. “Files are not cleared unless one greases the palms,” he lamented.
On land reforms, CREDAI said restrictive land use has led to raising the cost of the tenements, killing agriculture land, reducing Green cover and made physical infrastructure costlier. It is high time the policy makers consciously shed their skeptical, narrow views on land use. Andhra Pradesh has set the right trend by removing the concept of FAR leading to stabilization of prices and creating adequate supply.
The current home loans for affordable housing segment with 1% interest incentive is still very costly for many needy people. The interest rates on home loan, especially in affordable category, cannot and should not be more than 7%. Also, the current guidelines by the Reserve Bank are anti-housing industry as the cost of finance is very high that in turn makes housing costlier.
Currently, any purchase of housing unit costs @ 36% in direct and indirect taxes which include VAT, Service Tax, Excise Duty and Municipal Taxes etc., At this rate, one has to earn 150% of one’s current income to be able to afford a house and end up paying a heavy income tax of 32%!
There is a need to devise a special tax-free affordable housing project scheme. Though there will be seemingly a revenue loss, this will be more than offset by the collection of other indirect taxes, he said.
Delving on slum rehabilitation, CREDAI said as much as 15% of entire population of this country lives in slums. Few urban areas in state like Maharashtra have come up with slum rehabilitation policy. However, these policies fall short of expectations to achieve desired results, mainly because they are impractical. Also, the Rajiv Awas Yojana in its present form cannot achieve desired results. “What we require is slum lord free environment where all the slum-dwellers attaining majority age of 21 get their own rightful homes,” Mr Jain argued.
These issues cannot be resolved by routine administrative remarks on files like “Please attend to” or “for your attention please”. Housing is a State subject. Even at the centre, housing policy making is fractured between two Urban Ministries, and several other Central Ministries which dabble into the matter at their own sweet will without even referring the matter to either of the Urban Ministries.
From the point of accountability, CREDAI suggested that for every building proposal submitted, there should be a mention of Revenue to be generated, Employment opportunity created, contribution to GDP, along with the date of application submission and the date of final approval. In case of delay, those responsible must be punished.
CREDAI said India’s urban population has grown from 290 million in 2001 to 377 million in 2011 which accounts for over 30 percent of the country’s population. The number of cities and towns has also increased from 5,161 in 2001 to 7,935 in 2011 - a 51% growth. The number of 1 million plus cities has grown from 35 in 2001 to 53 in 2011, registering a 45% growth.
By 2031, India will have more than 87 metropolitan areas and the country’s urban population is likely to soar to over 600 million, adding about 225 million people to present urban population.
“If this goes unchecked and unattended, we will have an explosive situation of hundreds of slum colonies everywhere because housing has become unaffordable,” Mr Jain said.
“Sir, we have been trying to seek an appointment with you for long since we cannot hope to achieve anything tangible without your intervention. We have already made several representations to all the concerned ministries but with no positive response,” the open letter said.
“It is in this context that, Prime Minister Sir, we would like to urge upon your honour to pay an immediate attention to the Future Shock scenario and take concrete steps to tackle the crisis,” the letter added.

‘Green Man’ Lalitkumar Jain heads CREDAI; Embarks on ‘Mission transparency’ in realty

NEW DELHI: Civil engineer-turned multi-project developer Mr Lalitkumar Jain, nicknamed as the “Green man of Pune” for his eco-friendly nature, who has been elected as the President of Confederation of Real Estate Developers’ Associations (CREDAI) has vowed to take up the issue of transparency in real estate deals.

 

Mr Jain, commenting on his plans for CREDAI, said the developer community as such has been facing several problems relating to transparency in transactions.

“We at CREDAI have planned to tackle with this problem head-on and ensure customer delight in our transactions. We are also keen to ensure that the customer relationship management gets a new meaning in real estate, for real,” he said.

Mr Jain, Chairman and Managing Director of Kumar Urban Development Limited (KUL) was earlier the Vice President of CREDAI (West) and his election as the national President marks a new high in his nearly 3-decade long experience as a developer.

A people’s man that he is, Mr Jain took active part in organizing the developer community. In fact, he was the youngest Secretary and President of the Promoters Builders Association of Poona (PBAP). He, along with Mr JiendraThakkar, has also played a stellar role in creating and developing the Federation of Promoters Builders Associations of Maharashtra.

Mr Jain has been associated with CREDAI right from its inception. As the first convener of CREDAI national convention in Vigyan Bhawan he is also credited for mobilizing the largest number of developers on one platform. He has been the Vice President of CREDAI twice and has significantly contributed to the organsiation’s activities and representations on policy and legal issues.

He started his career at the age of 17 years as a supervisor in a Pune company and contributed to the firm making handsome profits. Restless to perform, Lalitkumar joined his father Late Shri Kesarimalji Kamdar‘s business Kumar &Co and mastered legal knowledge and the government policies.

With his Company Motto - “We Build Trust” - he practices what he preaches. Small wonder his business grew manifold and Kumar Builders quickly became synonymous with quality real estate of Pune. In 1999, his family saw partition and Lallitkumar started with development of 35,000 sq ft and within five years he delivered 1.4 million sq ft.

He has carved a niche for himself in Pune construction with more than 100 projects and 14,000 tenements, setting a new benchmark in trustworthiness. Apart from residential complexes, he developed IT Buildings, Retail Malls, IT Park and gated communities.

Kumar Builders has recently been rechristened as Kumar Urban development Limited to give it a new identity to change with the changing times. KUL has so far developed 70 million sq ft with 9million sq ft of city centre projects, with focus on Pune and Mumbai.

Bangaluru, Hyederabad and Nagpur are on KUL’s radar for the near future. Its current projects range from redevelopment projects to SEZ.

KUL can also be credited for being the largest single contributor to the City’s greenery drive. Each year, KUL donates about 10,000 saplings to the civic bodies, besides developing public gardens.  The environment park called “Nakshtra Udyan” stands testimony to the fact that greenery is a way of life at KUL.

Presenting environment friendly projects, KUL is one of the first developers to have received the coveted  ISO 14001 certification under 2004 guidelines, globally

The company, under Mr Jain’s leadership, has been hounoured with the National Shrusti Award for contribution to environment as it was the first developer company to adhere to PMC’s environment norms. It has also won “CNBC CREDAI AWARD” for Best Commercial Building Systems, City Scapes’ “Future City Award”, “Amacus” Best Developer Award, “Best Regional Developer Award” by Realty Plus. KUL is rated as one of the top 10 developers of INDIA by Construction World Magazine in 2009.

A meritorious student right from his 1^st Standard, Mr Jain has shown keen interest in education and sports. For well over decade, he has been running a unique project called “Adarsha Vidya Mandir Yojana” designed to ensure an overall growth of students by adopting schools especially in backward rural areas around Pune.

Now, he is all set to major role at the national level taking up passionately the cause of developers and their stake holders – the customers.