Lesson from Singapore: For Cheaper Homes, Cut The Red Tape
India has much to learn from Singapore on real estate policy. When World Bank ranks countries on dealing with construction permits, India is consistently on the bottom of the list while Singapore is consistently on the top of the list. In India, real estate developers often face huge delays in receiving approvals for construction of projects. Their plans are rejected with retrospective effect. Many government policies are not implemented on time, and when projects are in progress, regulations are routinely changed. Real estate developers face much political interference in the construction process too.
Yesterday, Confederation of Real Estate Developers' Association of India (CREDAI) , the body of real estate developers observed a one day nation-wide strike. The trigger was that Suraj Parmar, a prominent real estate developer in Thane committed suicide recently. According to media reports, what compelled him to take his own life were problems, which real estate developers routinely face.
Real estate developers have a bad press, but this is puzzling. Like homes, food is a fundamental need of human beings. But, this does not stop us from recognising that food is cultivated by farmers. If the legitimate needs and rights of farmers are ignored, they would not be able to produce food in large quantities. When there is a famine, the best the government could do is to create a regulatory environment that allows farmers to produce wheat, rice and other food items in large quantities. But, such obvious principles of market economics are ignored in discussions on real estate regulations and affordability of homes. If there is a shortage of homes, the best that can be done is to allow developers to increase the supply of homes.
How can India improve by learning from Singapore? How does India fare in the freedom real estate developers enjoy?