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Quick clearance the best way out

Experts say that single-window clearances will put an end to corruption in the real estate sector

realestate Updated: May 23, 2014 18:47 IST

As per a recent report of the committee on streamlining approval procedures for real estate projects set up by the Ministry of Housing and Urban Poverty Alleviation, a whopping 34 regulatory processes have to be followed by a developer for obtaining construction permits. On average, it takes about 227 days to get all clearances.

Real estate experts say that multiple approvals, required at each stage for a real estate developer in India, slows down and complicates the approval process considerably. Also, unjustified demand for money increases with the number of approvals a developer has to get. “With such frequent physical interactions, the chances of corruption also increase,” says Gaurav Gupta, general secretary, Raj Nagar Extension Association.

Single window clearance, says Kunal Banerji, CMO, M3M, “will drastically bring down the delays and the costs related to corruption.”

Delays in approvals and adherence to regulatory processes also push up construction costs by 40%, which inadvertently gets passed on to the buyers, making housing unaffordable and forcing buyers to exceed their budgets.
There are a huge number of clearances and officials to go through, complain builders.

Abhay Kumar, CMD of Griha Pravesh Buildteck Pvt Ltd, says, “for a multistorey a developer needs to get clearances for excavation from the collector, layout approval from the planning authority of that city, fire fighting from the fire department, structural drawings from different agencies all over India, pollution NoC from the Pollution Control Board, environment clearance from environment department of the state. If it is a green building then a green signal has to come from IGBC Hyderabad or Griha, lifts from safety department, completion from planning authority etc.”

These approvals lead to cost escalation and increase in the base value of the project. “Single-window clearance will help cut timelines and allow developers to scale back financing costs by 10 to 25%,” says P Sahel, vice chairman, Lotus Greens.

Interestingly, Ahmedabad, Chennai, Cochin, Kozhikode, Madurai, Trivandrum and Pune already have automated systems for approving building plans.