Good news for home buyers ! Government to fast track approvals of Real Estate projects and make approval status available online.
The government plans to fast track approvals for real estate projects and put up all approval status online in a move that will help consumers check if a project is approved before booking a house and bring down home prices.
A committee on streamlining approval procedures for real estate projects, headed by former Competition Commission of India chairman Dhanendra Kumar, will submit its report to the ministry of housing and urban poverty alleviation this week and it will form the basis of a policy guideline that all states will need to follow.
These guidelines would be one of the conditions precedent for states to access central government funding from the housing ministry.
The committee is likely to suggest bringing all state and central clearances on two separate electronic platforms so that builders can get faster clearances without having to go to multiple authorities for individual approvals.
Uploading approval status on the Internet will be a great relief to home buyers who till now have had to go by the developer's word that all approvals have been taken before the launch of a project, only to see it gets stuck after paying significant sums due to the lack of some approval or the other.
Faster approvals will also help builders bring down home prices significantly because approval delays, which sometimes run into years, result in costs escalating by up to 40%.
"Home prices can become cheaper by up to 40% if approvals come faster," Lalit Kumar Jain, the national president of the Confederation of Real Estate Developers' Associations of India and the managing director of Pune-based developer Kumar Urban Development, said.
Developers say large housing projects in the metros involve getting more than 50 approvals from various authorities in the central, state governments and local authorities including the environment ministry, National Monuments Authority, aviation ministry, and several departments such as forest, water, pollution, fire, revenue and town planning. A housing project with 100-150 apartments in Mumbai could take up to three and a half years for getting all clearances, Jain said. The situation in Bengaluru, Chennai and Gurgaon is a trifle better, with time taken for approvals ranging from two to three years.
In this period, most developers who have brought fresh land for the project end up paying interest.
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