BCR NEWS (Mumbai): ‘Cumbersome Nature of the Approval Process for Real Estate Projects in Mumbai – Its Economic Impact and Solutions’ is a research study done by a 11 standard student Maulik Jain from Mumbai who has seen his father, a Mumbai-based real estate developer fraught with concern over the complexities caused due to delays in the real estate approval process.
The study deals with topics like the importance of the real estate sector and its contribution to the Indian economy, cumbersome nature of the approval process, innumerable approvals, stages involved in real estate projects, lengthy time period in approvals and also cite the reasons for delay. The entire study has been done under the aegis of “CARES (Creating Awareness in Real Estate issues in Society), an initiative co-founded by Maulik Jain and Adv. Vipul Shah and supported by Key RTI activists.
Maulik also did a thorough study on the economic impact which causes due to the delay of the real estate projects, costs and economic cycle, ease of doing business and Foreign Direct Investment (FDI), Affordability, Livability Index, Creation of a Parallel Economy.
“Today, tens of hundreds of developers struggle to cope with the existing complex & unique real estate regulatory procedures. Visits to acquire the necessary approvals from numerous government agencies around the Mumbai Metropolitan Region (MMR) stall the development process, increase development costs and lead to the frustration of customers,” says Maulik in his research report.
In addition, developers experience a plethora of problems on a day-to-day basis explains Maulik. “The Indian real estate market poses an interesting paradox. On one hand, it is undoubtedly a major driver of economic growth, with the housing industry representing the second largest source of national employment after agriculture. Moreover, it contributes greatly to Gross Domestic Product (GDP), attracts copious amounts of money in Foreign Direct Investment (FDI) and leads to heightened demand in ancillary industries such as steel, cement and building materials. However, on the other hand, the sector’s incredible potential is marred by some unfortunate challenges. Approvals and archaic procedures are coupled with the lack of clear land titles, rising material costs and the lack of an industry status,” he explains in his research and says that these delays and problems significantly prevent the progress of the Indian economy.
“Once these issues are resolved, I believe the full impact of Indian real estate with its huge demand for housing, rising income levels and rapid urbanization can truly be experienced,” he observes.
Through his report, the young researcher aims to highlight the cumbersome nature of the approval process for real estate projects particularly in Mumbai and analyze its economic impact by using the knowledge he gained in through the Economics Higher Level course in his International Baccalaureate Programme. Maulik also recommends the utilization of Information Technology to the maximum and the essential need of the single window system, a one-stop clearance mechanism, as an effective solution to smoothen the approval process. The need for this system was resonated by Prime Minister Narendra Modi, at the Vibrant Gujarat Global Summit in the month of January 2015. Finally, he tried to make comparisons with economies of Hong Kong & Singapore that have been successful in settling these issues.
Hence, according to the researcher, the cumbersome delay in the approval process poses a major drawback in the progress of the nation. The economic impact of the delay through costs, time, affordability, the livability index, foreign direct investment (FDI) and the creation of a parallel economy cannot be emphasized enough. The implementation of the solutions discussed above, with a special emphasis on the single window system could revolutionize the economy, Maulik Jain concludes his comprehensive 4-month research report with an optimistic note that all stakeholders will do their duties diligently and real estate in Indian is soon a far more welcoming industry.
