Tag Archives: Ajay Maken with President

Policy advocacy desirable yet debatable in realty-III

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Ajay Maken with President, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: Some analysts are of the view that in some other sectors people are vocal because they come from very powerful political background and are second generation entrepreneurs. Then, they are active at the federal level without any structural defect where policy at centre might help at some level and hamper at some other state level. Automobile policies, for instance, are framed for across the country.

Sunil Dahiya, Senior Vice President of industry body NAREDCO admits that if real estate has not been that vocal and pro-active on policy advocacy, it is because every policy will have 28 rules and regulation across the country. So, every rules and regulation deployed will have 28 different effects for the sector.

While a single solution is not possible, yet since the realty product is needed across the country, there is an urgent need for brainstorming as to how a customized policy advocacy for each region as a chapter and a common goal at the national level is achieved.

“Policy advocacy can only come out when there is a single consensus. We have been successful in drawing a single consensus around the Regulator Bill by discussion with stake holders in the state chapter. The draft has been carefully amended to protect the interests of all the stake holders in consultation with Consumer Helpline, Jaago Grahak Jaago, CCI, Finance Ministry, Housing Secretaries from states, ED, DRI, CREDAI, NAREDCO along with delegates from across the country. The draft has now gone to the standing committee of Parliamentary Affairs. So, our policy advocacy brought on the table aspirations of various stake holders and now it is going to the Parliament for debate,” says Dahiya.

However, fact remains that all the stake holders were taken on board on the issue of regulator because the ministry took the initiative, while modalities were being debated within the sector ever since government came out with the idea of having a regulator.

Moreover, the Centre’s plan to regulate the developers has already hit a road block with several states opposing some provisions of the proposed bill. The proposals of a central regulator actually snowballed the issue like the NCTC (National Counter Terrorism Centre), and the Centre having no choice but to drop the provision of giving direction to the states under the Real Estate (Regulation and Development) Bill.

The school of optimism within the sector cites another case study to put forward the point that the sector is on its growth trajectory with policy advocacy. According to them, on the issue of much desired Single Window Clearance a committee has been formed under the ex Chairman of CCI, Dhirendra Kumar at the behest of the industry bodies, including CREDAI and NAREDCO.

The bodies are advocating for one department in all states to act as a nodal point for all online clearances in a time frame, instead of today’s multiple NOC regime. It once again raises the very same question—will states agree to it?

Policy advocacy optimists have it that it has to be promulgated at the Ministry of Housing level with a financial rider. State governments having wish list of grant and financial package from Centre will have to agree on that.

Arvind Nandan, Executive Director, Consulting Services, Cushman & Wakefield is candid enough when he says any talk of policy advocacy is meaningless unless the government is a willing party to come on board for dialogue and discussion. Developers alone can’t take policy advocacy forward because they have been a partner in crime with project delays and illegitimate source of funding in the sector.

“The idea behind policy advocacy must be to bring government and private players together for meaningful dialogue and discussion for the benefit of all stake holders, including the consumers. What is happening actually is that sector lacks vision on reforms and hence policy means different things to different stake holders. There are developers, financers, facilitators, occupier…Even when you say land owners, it can be either a developer or agriculture land owner, and to bring everyone on board for consensus you need credible industry forums. I am not sure unlike other industries a standalone face can represent the sector, since there is no superstar or charismatic leader in the sector today,” says Nandan.

No superstar to represent the sector, no consensus over its wants and needs and no sympathy in the collective consciousness of other state holders, including buyers and government; will all the builders’ bodies continue to flex muscles with money power yet function as a toothless tiger? Well, if lobbying of powerful players for individual interest continues and if the sector by and large resists a common meeting ground then policy advocacy is a far cry in the sector.

Union Housing Minister sets developers’ tone on FSI issue in Mumbai-I

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By: Ravi Sinha

Ajay Maken with President, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: For quite some time the developers in Mumbai were making pitch for the review of FSI in the city which they termed as archaic. Their grouse has not been lacking the merit also.

Facts speak for themselves. In 1964, FSI was introduced and set at 4.5 in Mumbai. While FSI is progressively relaxed in most global cities, in Mumbai the experience has been the reverse. FSI was reduced to 1.33 in 1991.  The city has one of the lowest FSI and floor space per person in the world.

Urban planning experts maintain that FSI below 5 spells disaster for any mega city like Mumbai. The developers have been asking to be increased as much it can be, or removal of FSI norms just like Andhra Pradesh as a much better option.

About 50 per cent of population in Mumbai stays in slums. Also about 84 per cent of homeless people are self-employed and contribute towards the economic growth. Since they live close to their workplaces and are an integral part of the India’s urbanisation story, irrespective of the location categories we need to create affordable housing even in the premium locations of mega cities.

What has added fuel to the fire of relaxed FSI norms is that now even the Union minister Housing and Poverty Alleviation Ajay Maken has made a strong pitch for a review of floor space index (FSI) policy of mega cities including Mumbai for encouraging the affordable housing. Maken believes this can be one of the solutions to tackle increasing urban development challenges.

“There is a need to review FSI policy and make appropriate changes to boost the affordable housing in Mumbai. The State is the responsible authority to do so and in our opinion it should consider this option. The policy for providing ‘Infrastructure Status’ to the affordable housing scheme is on the cards to improve the urban housing scenario. This can be treated as a sub sector of real estate and at least, this sub sector can be given the infrastructure status,” Maken said in his address at the international meet on “Governance of Mega City Regions” organised by the Confederation of Indian Industry (CII) in partnership with Centre for Policy Research (CPR) in Mumbai.

Welcoming the stand of the Union Housing Minister, Lalit Kumar Jain, National President of CREDAI says Ajay Maken who has understood issues of urbanisation has given out his view and from his statement it is clear that he understands the need of FSI relaxation. Now, it is state government’s turn to understand the condition of overcrowded Mumbai and the situation of thousands of homeless Mumbai dwellers.

“We hope that the Maharashtra government takes note of the minister’s suggestion to hike Floor Space Index (FSI) to encourage affordable, mass housing for slum dwellers as well in premium locations. Affordable housing is the need of the hour, and for this, FSI policy should be reviewed. In cities like Mumbai where population is growing day by day, vertical growth is the only option. If the FSI policy is revised then mega cities like Mumbai and Bangalore will have vertical residential development. This will lead to development of residential projects at a comparatively lesser cost, and buyers will get homes at good rates,” says Jain.

 …..to be continued

Single window plan for real estate projects soon: Maken

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Ajay Maken with President, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty-Agencies: In a move aimed at providing a major fillip to the construction sector, the Centre is likely to come up with a ‘single window’ system for the country’s real estate sector soon, Union Minister for Housing and Urban Poverty alleviation (HUPA) Ajay Maken said in New Delhi on Sunday, March 24.

Maken’s remarks, made at the National Editors Conference held at the Vigyan Bhavan, are pretty significant since under the existing system it is not uncommon for real estate projects to be held up for up to one year or more before the necessary sanction is accorded.

“The ministry (HUPA) had set up a Committee under the Chairmanship of Dhanendra Kumar for Streamlining Approval Procedures for Real Estate Projects (SAPREP).”

The Committee had since submitted its report and the Ministry was in the process of formulating a ‘single window’ system for the clearance of real estate projects throughout the country, which was expected to bring down the average approval time from 196 days to 45-60 days,” the Minister said.

According to him, the process involved the submission of a single composite application form (CAF), which would ensure simultaneous clearance from the municipal corporations, state governments and the Central agencies.

Maken said that the Ministry would incorporate the recommendations of the SAPREP Committee as one of the mandatory reforms to be carried out by the states, if they wanted to avail the funds provided under the ‘Rajiv Awas Yojana’.

It was also revealed that the HUPA would mobilise a whopping Rs 60,000 crore to finance its ambitious housing scheme for the low income group (LIG) and the economically weak sections (EWS).

And a credit risk guarantee fund trust (CRGFT) partnering the National Housing Bank (NHB), HUDCO and other financial institutions has been set up for the purpose and the steps initiated by the ministry would significantly  help to bridge the gap between shelter and housing, the Minister added.

On the Urban Housing Fund announced by Union Finance Minister P Chidambaram, Maken said that a separate fund of Rs 2,000 crores, to be administered by the National Housing Bank, had been envisaged to support the financing and credit to the affordable housing sector.

It will benefit the LIG and the EWS sections, which were not getting the benefits under the current priority sector lending limit of Rs 25 lakh. HUPA had decided to limit the loan amount to  `8lakh and the cost of the dwelling units to  Rs 12 to Rs 15lakh.

Government mulling tough real estate regulator: Ajay Maken

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Ajay Maken with President, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty-Agencies: Government plans to set up a tough regulator for the real estate sector with provisions for even jail term for the developer for putting out misleading advertisements about projects.

The proposed regulator will also make it mandatory for developers to launch projects only after acquiring all the statutory clearances from relevant authorities, Minister for Housing and Urban Poverty Alleviation Ajay Maken said at the National Editors’ Conference in New Delhi.

He said all relevant clearances for real estate projects would have to be submitted to the regulator and also displayed on a website before starting the construction.

Maken said a proposal for the Real Estate (Regulation and Development) Bill, which seeks to provide a uniform regulatory environment to the sector, will be brought before the Union Cabinet soon.

“We plan to introduce the Bill during the Budget Session of Parliament,” he said.

The Bill has certain tough provision to deter builders from putting out misleading advertisements related to the projects carrying photographs of actual site.

Failure to do so for the first time would attract a penalty which may be up to 10 per cent of the project cost and a repeat offence could land the developer in jail, Maken said.

The Bill also has provisions that seek to clearly define a carpet area for an apartment thus barring the developer from making any announcements regarding a “super-duper carpet area”, he said.

The proposed Bill also seeks to make it mandatory for a developer to maintain separate bank account for every project to ensure that money raised for a particular task is not diverted elsewhere, Maken said.

Challenges surround reforms and facelift of Indian realty

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By: Ravi Sinha

Ajay Maken with President, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: The Indian real estate today stands at a crossroad where it seems the government is confused, the developer is confused, the financer is confused and the buyer is confused. They all seem to be in a wait and watch mode but not sure as to waiting for what. While the government is sitting over two crucial bills that has far reaching implications on the future of Indian real estate, reforms and regulation means different things to different stake holders. With a tectonic shift expected this year, all the stake holders are evaluating their own cost-benefit.

Prima facie what seems to be a year of fair play for the buyers may not be music to the ears of the developers, though for buyers also this transparency seems to be coming with a price tag and definitely not on the expected lines of price crash. Investors and fund managers are already clueless where to go as the lock-in period of their investment comes to an end with many developers not in a position to repay.

Overall, there is a serious cause of concern, since India has acute shortage of homes and the absence of level playing field for all the stake holders may lead to less new launches and even lesser fresh supply. The government seems to be debating the regulator bill and land acquisition bill with the right intentions, many feel problem lies in their understanding the business of real estate in a holistic manner.

However, Sachin Sandhir, Managing Director-South Asia of Royal Institution of Chartered Surveyors (RICS) strongly advocates for a regulator in the year ahead.

“The question is no longer on whether we need a regulator, but on the fact that in what shape and form should regulation be imposed and who should fall within its purview. Real estate markets in countries like South Africa, US and UK can serve as role models where the sector and practitioners are regulated through legislation, voluntary schemes and self regulation across all key activities,” says Sandhir.

Maintaining that funding is an issue, Anshuman Magazine, CMD of CBRE South Asia says revival is a strong statement in today’s market. He believes the pending bills are not going to make any major difference as far as revival of the market is concerned.

“How these new laws are framed is also very critical since if you talk about the land acquisition bill, which in its present form is going to make the acquisition more difficult. And that is not good for the industry and overall infrastructure. With regard to the regulator, I would say it is good in the long term only if it balanced and aimed at regulating all the stake holders, including the buyers,” says Magazine.

Harmit Chawla, Managing Director of HCorp Realty agrees that the biggest drawbacks in the sector is to not being sure what precisely is needed from the government, nor is there any clarity as to how those demands will help the sector; whether demands are feasible from ethical, financial or legislative point of view.

When someone says Indian real estate lacks global standards, it is like stating the obvious. Dr Anil Sharma, CMD of Amrapali Group, on the contrary, questions why only the sector should be transparent when the entire eco system surrounding 50 odd clearances are way too challenging for the developers. He, however, maintains funding is not a problem when there is a demand in the market.

The question is from where do we head in the year 2013? Unfortunately, there is no clear answer to it in a market where regulation and reforms are at loggerheads. It is a strange paradox of economics that an asset class is increasingly appreciating its value even in the wake of substantial drop in demand.

Sunil Dahiya, Sr Vice President of industry body NAREDCO regrets the commercial essence of the business has been taken out. The consumer is waiting for something, and he is waiting in eternity for something better to come. He asserts what the consumer is waiting for, we also don’t know. So, the consumer has been loaded with confusion, and we are loaded with a product which is dead.

Suggesting anomaly with the proposed regulator, PK Tripathi, President of Unitech says the central government has to realise that there are certain action points that are with the states and the states are not going to leave it. Having realised that, the role of the central government in any regulatory bill should be restricted to the laying down the policies for environmental clearance or approvals from central government authorities like airport authorities. All these things through technology can be made automatic.

Beyond the debate over the future of the sector vis-à-vis emerging regulatory realities, an average home aspirant stands clueless whether his dream of a house is going to be cheaper in the year ahead. More importantly, is there any redressal or recourse in the wake of being at the receiving end of misconduct and malpractice at the hands of both developers and brokers. Only viable option for such harassed home aspirants is to look for ready-to-move houses. However, such inventory is hardly available within the reach of most of the house seekers.

HUPA for inclusion of affordable housing in infrastructure list

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Ajay Maken with President, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty-Agencies: To provide cheaper houses for lower income groups, the Ministry of Housing and Urban Poverty Alleviation (HUPA) is working for the inclusion of affordable housing in the infrastructure list.

Minister for HUPA Ajay Maken said his ministry was taking several steps to increase the outreach of its schemes.

“In order to provide greater outreach for housing schemes of the government, my ministry has recently revised the income sealing for qualifying for various schemes. Now the revised annual household income limit for the economically weaker section is enhanced to Rs 1 lakh from Rs 60,000 and for that of Lower income group, it is Rs 2 lakh from the earlier limit of Rs 1.2 lakh,” Maken said.

“We are also working for the inclusion of affordable housing in the list of infrastructure to provide necessary fillip to this sector,” he said, speaking at a convention organised by the National Real Estate Development Council (NAREDCO).

Maken said that as per the technical committee constituted by his ministry, the shortage of housing stands at 18.78 million out of which 96 percent is in the economically weaker sections and lower income group category.

The Minister said that efforts were needed to be made at the centre, state and private levels to meet this shortage. He said that banks were finding it difficult to provide credit to economically weaker sections due to a number of reasons.

Maken said that housing for the economically weaker sections will make a viable business proposition if private players focused on the economies of scale where larger the quantity, greater will be the cost savings.

“I urge the private sector to venture in to this realm in a big way,” Maken said, referring to large scale construction of cheaper houses.

“Bringing transparency in the real estate sector is another area of my ministry which will go a long way in ensuring orderly growth of this sector. We have been working for formulation of a real estate regulation and development bill after getting inputs from all the stakeholders,” he said.

He said a recent Mckinsey report has said that India is capable of unleashing a wave of affordable housing stock, even in the short term.