Confederation
of Real Estate Developers’ Associations of India (CREDAI) is organizing
a National Conference, titled as “CREDAI CONCLAVE”, with a theme, “Housing the
Game Changer – Leading to Double-Digit GDP Growth”, at New Delhi on December
13- 14, 2013, against the backdrop of its continuous efforts over a period of
time to persuade and influence the government to take up several reform
measures and policy changes.
CREDAI,
under the leadership of its National President, Mr.C. Shekar Reddy, has been at
the forefront in representing to and advising the government that if right
policies are put in place the Housing and Real Sectors could truly be the
Game-Changers in providing the necessary thrust and momentum to the economy,
which has unwittingly been experiencing several vicissitudes and passing
through a weak and slowing economic growth.
Propelled
by the rapid urbanization, the urban population is poised to grow to 590
million by 2030. McKinsey Global Institute reports that the urban India, over
the next 15 years, is expected to create 70% of all new jobs and these new jobs
are going to be twice as productive as equivalent jobs in rural sector. In
other words, we will witness over the next 15 years an urban transformation the
scale and speed of which has not happened anywhere in the world except in
China. This expected transformation will, if handed well, provide the means to
turn around the economy from slowdown to rapid growth.
Given
the existing housing shortage estimated at 18.78 million dwelling units (Report
of MoHUPA) and the high multiplier-effect the Housing and Real Estate Sectors
have on 300 different manufacturing industries, such as steel, cement, electrical,
lifts, etc. Given the high employment potential these Sectors collectively have
next only to the agriculture, the housing and real estate sectors could create
a positive and widespread impact on the Indian economy.
Realizing
the importance of Housing and Real Estate Sectors and the imposing theme the
CONCLAVE set for the policy makers to address, the eminent dignitaries, like
Dr. Girija Vyas, Minister for Housing and Urban Poverty Alleviation; Mr.
Akhilesh Yadav, Chief Minister, Uttar Pradesh; Mr. Bhupindir Hooda, Chief
Minister, Haryana; Mr. Sukhbir Singh Badal, Deputy Chief Minister, Punjab; Sri
Rajnath Singh, President, BJP; Dr Montek
Singh Ahluvaila, Deputy Chairman, Planning Commission; the top guns of Banking
Sector, such as Ms Arundhati Bhattachraya, Chairperson, SBI; Ms Naina Lal
Kidwai, Head, Indian operations of HSBC; and Mr. Uday Kotak, Executive Vice
Chairman & MD, Kotak Mahindra, and some prominent economists and many
others, are going to speak on different Sessions in the CONCLAVE on subjects,
such as “Road to Recovery”, “Urbanization: Dream of Young India”, “BUILDING
A NATION - Contribution of Real Estate in National Economic Growth”, “The
Game Changer”, and provide necessary thrust for policy
change and reforms.
Besides
the rigidities of regulatory and administrative systems, the Housing and Real
Estates Sector suffers from enervating and undeserving handicaps in accessing
the necessary funds from the banking and financial institutions. The funding
norms and stipulations are restrictive in their scope and are highly
adversarial to the needs of this Sector. There is another factor that inhibits
faster spread and reach of this sector to the needy people at affordable and
lower costs. It is expected that sessions with the chair persons of banks and
planning commission’s deputy chairman should help effect some changes in the
funding norms. There is also an issue of inordinate delays in plan approvals
and permissions from various authorities. CREDAI has been impressing upon the
government authorities to cut down the delays and institute “Single-window and
Online Approval System”. The elimination of delays in sanctioning will
drastically reduce the costs of house-construction and speed up the
construction activity with substantial economic benefits. This is another the
CONCLAVE will address.
The
CONCLAVE will thus pave the way to understand the great potential the Real
Estate Sector holds for the country in catalyzing and rejuvenating the growth
trajectory of the country, which has been experiencing economic slowdown, going
down from a high of 10.5 percent in Q4 of FY 2006 to a low of 4.8 percent GDP
growth in FY 2013.
The
CREDAI holds the view that this Sector,
being the primary driver of the economy can fast forward the economic revival,
provided the government wakes up to the unfolding potential of the Sector and
takes necessary policy initiatives. The government has however initiated
several policy moves in the form of Real Estate Regulatory Authority, Land
Acquisition Bill, Real Estate Investment Trust, Affordable Housing policy. But
these policies are not without any inadequacies in their nature and character.
The CREDAI has been proposing to incorporate several changes in some of the
policy initiatives of the government and plans to address them in this
Conference.
Sri
C Shekar Reddy, the National President
addressed the media on salient features of the CONCLAVE and offered
insights into the spirit and fervour of the CREDAI’s Mission to unshackle the
rigidities of the present regulatory regime.
He announced the convening of National CONCLAVE at New Delhi. It is
expected that more than 1000 developer members of CREDAI across the country
will attend and deliberate at this Event.
Speaking
about the different issues concerning The real estate sector Mr. Shekar Reddy,
President, CREDAI National said “The Housing & Real Estate sector is poised
to grow rapidly in the next 15 years and require an investment of $ 1.2
trillion in this period. To facilitate this growth the approving authorities will
have to do away with their processes which are sluggish and cause inordinate
delays in project plans approval etc which translate into a cost escalation of
35 – 40 percent in the construction costs. The customers can benefit with a
saving of 25% merely by cutting down the delays in the approval processes, and
make the cost of purchasing a house much more affordable. He emphasized on the
need to ensure that the delays do not take place at the approval stage and
advised the governments to institute the “Single Window – Online Approval
Mechanism”. “
Commenting
on the issue of taxation, Mr. Reddy stated “The taxes cumulatively are as high
as 35-40%, which is a heavy burden and adds to costs of the housing project and
making the houses expensive. He therefore urged that the taxes should be
brought down so that houses can be affordable to common man. “
Appreciating
the policy of the government of Andhra Pradesh he said “Through a GO 168 they
have removed the concept of FSI thereby allowing the developers with unlimited
FSI for the projects abetting wider roads and having bigger plots. By this
principle, on a given piece of land more dwelling units are built, yet leaving
more green/lung spaces all around the building as set-backs are more than the
earlier rules. By this simple initiative, even with higher land costs, the
flats are working out to be less expensive making the houses affordable.”
Commenting
on the issue of funding for the real estate sector Mr. Reddy said “The realty
sector suffers from another drawback. This sector faces several restrictive
norms in accessing the bank finance. In India the funding to the realty sector
is just 3 percent to developers, and 9 percent to home buyers. Out of this 3
percent lending, 90 percent of the loan is accessed by 10 percent of the
builders and therefore 90 percent of the builders have difficulty in accessing
the bank funds. Thus it is in effect thwarting the growth of the sector as
increasing the cost of the housing. Due to inadequate funds access by the
developers the growth of the sector is stunted. If the funding is made
available from the banks both the growth of the sector could be raised and
costs of the house flats could be brought down. “
He
expressed his concern while comparing the lending percentages with other
countries and said “The Indian scenario
is disturbing as the lending percentage in US is 32% and in China it is
22%. Compared to these numbers, the Indian lending is just 12% when the lending
to developers and to the home buyers is combined. He averred that this must
increase and the banks and governments have to search their hearts whether the
policies they are adopting are consistent with the growth ambitions.”
Speaking
on RERA Bill, Mr Reddy said, “ RERA bill
is another Act going to be targeted against the developer. Other stake
holders such as urban local boards, electricity authorities, fire departments
are not part of the proposed RERA, thereby they are not answerable for their
delays but the developer has to bear the brunt. If the with proposed stringent
provisions, if not modified, will increase the cost of the housing by about
30%.
Mr.Ponnala Lakshmaiah,
Hon’ble Minster for IT & Communications, Government of Andhra Pradesh was
the Chief Guest and released the Brochure of the Conclave to officially declare
the CREDAI CONCLAVE, 2013 at New Delhi on December 13 -14, 2013. Speaking on the occasion he said “We
compliment CREDAI for the great work and initiatives undertaken and the advice
given to the government to bring in reforms and changes in the policies to
benefit the industry and fuel the growth of the country.” He further added that
“ The approval of ITIR , under government of India policy of 2008 for Hyderabad is unparalleled and will bring
a marked change in the landscape of Hyderabad by attracting a lot of
investments both into ITIR and the real estate.”
He wished that CREDAI CONCLAVE 2013 would
bring forth more constructive ideas to help develop the real estate sector and
the overall infrastructure in the country.”
For
further information contact:
Konnections
Sarodhya Yadav: 86860 80577 / Shirly Priyanka: 98850 16595
Photo Caption from Left to Right
Mr. N. Jaiveer Reddy, President
CREDAI Hyderabad, Mr. S. Ram Reddy, president, CREDAI Andhra Pradesh, Mr.
Ponnala Lakshamiah, Minister of IT & Communications, Govt of AP, Mr. C.
Shekar Reddy, President, CREDAI National, Mr. G. Ram Reddy, General Secretary,
CREDAI Andhra Pradesh
For Media Contact:
Mr. Amit Mishra
M: 93440 75741
Email: amit@konnections.co.in
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Communication Consultancy
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