In this budget, the government should definitely come up with the long-awaited single-window approval system among other effective policies to benefit both the homebuyers and developers, says Arjunpreet Singh Sahni, Executive Director, Solitairian Group.
All the stakeholders of the housing sector are eagerly awaiting the day when the government will bring in single-window system for the speedy clearance of housing projects. From the developers’ perspective, as per an estimate, the current multi-agency clearance system adds forty per cent to the overall cost of a project, as it takes a minimum of two years to get all necessary approvals for the development of any real estate project and by then the costs of almost all the required raw materials gets increased.
More than 50 different approvals are required to be obtained from different authorities to build a real estate project currently and hence it becomes a lengthy and cumbersome process. For example, even to get the ownership certificate which should not take more than 15 days, actually takes a few months to acquire it. The other clearances, such as archaeological and EIA clearances, besides aviation clearance may also take two-three years. Then, a building permit is also required to be obtained from the building proposal office and that takes another 8-12 months.
Then there is non-agricultural permission required to be obtained, besides several other NOCs, such as NoC from forest, traffic and fire departments. In order to obtain all these certificates a developer has to run pillar to post. Any delay in acquiring all these approvals works as a key deterrent during the process of project construction. Roughly, it takes over 15 to 40 months to acquire all these approvals. Even though the Government of India has already issued a circular for the timely clearance of the project, still it takes several months.
Therefore, a reform in approval process is urgently required, so that the real estate projects can be finished on time. In this backdrop, there is an urgent need to reform the whole process of getting approvals, so that the projects can be started as well as finished on time.
For this purpose, if single-window clearance process is activated, both construction time and cost would be reduced and hence the developers would be able to take a giant leap forward in the direction of providing affordable housing to the masses. As per an estimate, the single-window clearance system can alone help to reduce the prices of the inventories in the range of 30-40 per cent.
Further, the developers will also be able to increase their sales volumes, due to the affordable prices of their inventories and hence the construction industry will flourish, providing massive employment opportunities.
Further, this step will also help the developers to double their sales and improve the earnings of lakhs of employees who are directly or indirectly dependent on real estate companies. Not to forget, it will add enormous job opportunities for both illiterate and educated youth of our country. Therefore, we are hopeful that the government will definitely introduce single-window clearance mechanism in the forthcoming budget to give a boost to the real estate sector.