#EconomicSurvey: 25% Housing Projects Get Delayed Due To Red Tape. Is Single-Window Clearance The Answer?

The Economic Survey, widely considered as the government's official report card on the economy for the financial year, is out. The biggest news point it throws up is that an estimated 25 per cent residential real estate projects in India are delayed due to poor project management and protracted regulatory approvals.

“It is estimated that over 40 different kinds of approvals and No-Objection Certificates (NoC) are required for a building project, which can take anywhere between two and three years for construction to start,” the Survey said.

This points to the importance of the long-pending demand of the sector for a single-window clearance system that will ease the red tape and hence, reduce the price of houses.

Talking to PropGuide, Rakesh Kaul, Chief Executive Officer, Experion Developers, said, “This has been one of the sore points where projects get delayed because they have to shuttle from table-to-table for approvals. A single-window clearance would be extremely good for the sector.”

CREDAI (Confederation of Real Estate Developers' Associations of India) Western UP President Deepak Kapoor had recently said, “Our second important demand (giving the real estate the industry status being the first one) is the single-window clearance system so that we can fulfil our promise of in-time delivery. Single-window clearance has been a dream, but if cleared, it would bring dedicated authority with great influence on speed of getting clearances because delays eat away profits and customer confidence."

Vikas Oberoi, Chairman and Managing Director, Oberoi Realty, wrote, “Introducing a single-window clearance system, covering both central and state approvals with pre-defined timelines for speedy approvals and bringing transparency, will bring confidence in the sector. This will also help in the timely completion and delivery of projects and will create a win-win situation for buyers, developers and government alike.”

According to the World Bank's 'Doing Business 2016', India ranked 183rd (out of 189 economies) in terms of construction permits, requiring an average of 40 procedures to get permits as compared to an average of 15.1 in South Asia and 12.4 in Organisation for Economic Co-operation and Development (OECD) countries.

Apart from this, the survey spells out the performances of the sector from investments to inventories.

According to the survey, the sector grew at 3.7 per cent in 2015-16, as against a growth rate of 4.4 per cent in 2014-15. However, the survey said the sector constituted eight per cent of India's Gross Value Added (GVA) in 2014-15 and grew by 9.1 per cent in 2015-16.