A construction permit
requires, among others, mining licence, tree cutting approval, borewell
registration certificate, no-objection certificate to operate a genset, change
of land use approval & a microwave licence.
Then there are
approvals required from Airports Authority of India, railways ministry,
National Highways Authority of India, environment ministry, ministry of
defence, Pollution Control Board and Coastal Zone Management Authority.
Incidentally, some
developers this reporter spoke to had no clue about what a microwave licence
stood for.
There are, on an
average, 35 permissions required only to obtain a construction permit (in some
cases more than 50), which takes at least 227 days, according to the 2013 World
Bank report on ease of doing business.
No wonder the report
puts India at 182nd position among 185 countries on the ease of issuing
construction permits.
In comparison, it
takes all of 26 days in Singapore, 67 days in Hong Kong and 69 days in Mexico
to obtain such a permit.
Mr. Anshuman
Magazine, CMD(India), CB Richard Ellis said, "It is not that clearances are
not required in other countries. But elsewhere the onus is on government
officials to give time-bound permission"
Mr. Navin M Raheja,
chairman, National Real Estate Development Council, "We remain so
preoccupied with obtaining multiple clearances and paying multiple taxes that
there is very little time left for focusing on improving quality of
construction, timely delivery and research and development"
According to a KPMG
report, the lengthy process of obtaining permits leads to cost escalation of
20% to 30%. And, multiplicity of taxes account for 30% to 35%of total housing
cost.
"In Noida or
/ Ghaziabad, you can get a mining
licence only if you approach authorities through a syndicate. The deal is to
forego your rights over sand that comes out of digging. Deal makers make crores
of rupees by selling that sand. But, that is a small price you will have to pay
to cross the first hurdle," a senior official of a Ghaziabad-based
developer told BS reporter. He and scores of other officials who gave inputs
for this story refused to be identified, fearing also the wrath of officials
working for development authorities. "The officers who give clearances are
the ones who do inspection also. We can not afford to annoy them in any
way," he added.
Obtaining a
construction permit is just the beginning of the story. Much bigger hurdles,
requiring constant "dealing" with officials of development
authorities follow, say officials associated with private developers.
"The toughest
challenge for all developers is to follow building bylaws. They were written
some 30 to 40 years ago. If they are followed in letter and spirit now, all
developers will lose money. So, they look for entering into some kind of a deal
with officials. Bigger the size of the deal, the greater the flexibility of
builders to vary from bye-laws," said a builder who has projects in
Ghaziabad and Greater Noida. He requested not to be identified.
A 2013 report of the
committee on streamlining approval procedures for real estate projects
constituted by the ministry of housing & urban poverty alleviation says:
"Some stipulations (of bylaws) are so complex that even experienced
technical person or architect find them hard to understand and in the process,
tend to violate the laws. Some areas of building bye-laws provide scope for
ambiguity, which brings in lot of discretion power vested to the
authority/officer, who can play with the applicants by rejecting without proper
reason or / cause delays. This paves way for collusion and corruption."
"You can get a
floor added to the approved plan, floor area ratio (FAR / Floor Space Index -
FSI) wrongly calculated, the leeway to convert parking slots into store rooms
or converting green spaces into parking slots-officials either have the power
to approve them or just overlook them if you keep them happy. All this happens
because our bye-laws have become archaic," added the developer quoted
earlier. He pointed out that obtaining occupancy and completion certificates is
another area where officials of development authorities have chance to cut
"deals".
It is not that
authorities are unaware of all these flaws in the regulatory regime. The
committee had observed that "most of the sanction and certification
processes in building permission lack transparency & are ridden with
systemic corruption at various levels.
The decision-making
process of sanction / rejection is not transparent and can be arbitrary. The
deficiencies in the system give enough room for foul play by fraudulent persons
operating within the system, harassing applicants/ builders for 'payments'.
Deficiencies in inspection and certification of building completion (compulsory
signing by official concerned) also promote corruption and / or collusion."
Src: BS
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