New Land Acquisition Bill is ready, PM Narendra Modi

Narendra Modi, PM of India slammed all the opposite political parties on the charges that BJP government is the pro-corporate and anti-poor, but conceded that BJP government is also the anti-development and anti-farmer government as they have come up with the land acquisition law which was proposed in Indian Parliament by the UPA government in the year 2013. Recently, BJP government has changed the 120-year-old law and takes the 120 hour to debate on it. And in the whole process it was not only the Congress party who was guilty on this count but also there were several other parties. The PM said in interview that we in BJP are also feeling guilty that we supported it as it was the main concern for the many formers because it can make the difficulty for the irrigation projects if we will not changed the land low.
The election period was coming up and the Parliament session was about to wind up that why we supported the hasty decision, but later all the state governments realized that this new law is big deal for progress. While taking on the Congress VP Rahul Gandhi, PM Modi stated that when opposition said that we are the anti-poor, so I just want to say that if they were well wishers of formers and poor’s then why there are so much irregularities and poverty in all over the country. The opposition has successfully created our false image and impression that we are helping the big carports houses to get the land at affordable cost., but still all the law and provisions are same for the corporate if they want to own the land as in 2013. I am so much confident that our government will uncover the lies as well as other perceptions because we are the changing the law for the better situation of farmers and their development.
The PM added that we are confident and our prospects for the Bihar state elections are clear which is coming up later in current year. People of the India have faith in the government of BJP and we full faith at every momentum to sustain the government in the coming elections. The more he added that we don’t have an pressure on fulfilling the expectations because we are already doing this as we are reconstructing the Indian on the global stage with many other economic factors such as; FDI inflow, power generation, inflation and many more .

Hurt Real estate sector

The decision of New CM, Devendra Fadnavis to review all major property development projects can hurt the real estate sector, as all the projects which was cleared in last four to six months of the previous government has put the sector in a fix. Big real estate projects are involving the huge cost and the sector itself will be in a state of suspense for four or six months now according to market experts.

What it is needed to review these projects?
The newly appointed BJP government is taking the cognizance of the charge leveled by the former irrigation minister Mr. Ajit Pawar because few projects of worth Rs12,000 crore were cleared in hurry during in last few months in the tenure of ex- Chief Minister Prithviraj Chavan. CM, Devendra Fadnavis wants to see if procedures were followed.

What does Prithviraj Chavan have to say?
Prithviraj Chavan told to DNA that new government has every right to review any kind of decision taken by his government. And the more he added “I have no problem if they will review the decisions taken be me. I haven’t done anything wrong in my tenure. If the cost of the projects increases by this move, then the incumbent government has to think over it”.

What is a cluster development project?
Any developer with minimum of 4,000 sq meters of land can represent the plan for cluster development, which will include all amenities. And after that government will allot the a Floor Space Index of four and it means means four times the land area can be build as towers or sky scrapers.

What did the previous government do?
The actual value of projects cleared is unknown and a slew of major cluster development projects, which are for Mumbai, were cleared during the last few months. Ajit Pawar was hinting the corruption blame when he made the allegation against his own Chief Minister Prithviraj Chavan.

Why are real estate developers upset?
All the real estate developers who have raised debt to continue the projects already cleared this review will means the huge loss interns of money and as well as reputation. Kailash Agarwal, Chairman of Avighna Developers, doing a cluster project in South Mumbai stated that “Cluster development policy will be affected by this review decisions. The review will result in three to four months escalate the cost many fold. There are only couples of cluster developments projects in Mumbai which have been successfully executed since the inceptions of the scheme in 2009. The more he added that all the developers now again have to pay the bribe for same project and its nothing else then chance to collect the black money.
President of National Real Estate Development Council, Sunil Mantri, said “ The new Chief Minister can review the previous government decisions because they have all rights to do this but it should be done “speedily and with good intention”.

Minimal drop in property sale in Mumbai

Even as Delhi and its surrounding region witnessed a 20% drop in sale, Mumbai saw marginal drop at just 2 per cent while Chennai and Hyderabad and Mumbai saw 18% and 13%, according to the 2014-15 real estate research survey by Liases Foras. Liases Foras, a non-brokerage firm, is into real estate researches. The survey was released on Thursday. It says that property sales across tier I cities in the country have dropped.  Proving that change in guard at the Centre has not changed the property market scenario.

The survey says that construction activity has increased in affordable and ultra-luxury segments in Mumbai. Flats that cost less than Rs50 lakh are selling more. Besides, the average prices have gone up in Greater Mumbai and Mumbai metropolitan region. In Greater Mumbai, this year a 2BHK costs Rs2.30 crore. Last year it was Rs2.14 crore… in MMR, a 2BHK flat cost is Rs1.32 crore while it was Rs1.20 crore last year, according to the report.

According to Pankaj Kapoor, MD, Liases Foras, “Currently, property market has been quite inflated and over-stretched. No one, including end-users and investors, wants to invest his/her money… and that has resulted in decline in property sales” . “Besides, there is a huge gulf between the current rates and expectations of end-users. They are still waiting for price correction. All things are attributed to the stagnant sales in Mumbai and other cities,” he told a newspaper. “Buyers cannot afford such costly houses. But developers have little choice. The land cost is already high and buyers have to pay various government taxes. If we meticulously calculate, buyers are forced to spend almost 10-15% of total flat cost on stamp duty, registration, valued added tax, service tax etc. To make houses affordable, the government should slash taxes,” Manohar Shroff, general secretary of the Maharahstra Chamber of Housing Industry (MCHI) demanded.

The Narendra Modi-led government cannot increase peoples’ income overnight. The current property market is beyond the reach of common man. An ineffective market will continue for some time. Despite low sales, developers are not bringing down prices. But they are offering sops such as waiving off stamp duty and registration charges to lure buyers.

The New Chief Minister of Maharashtra

The first BJP government of Maharashtra is committed to providing roof over every head and accelerating housing industry in Maharashtra to realize the vision of housing for all by 2020, said Maharashtra CM-designate Devendra Fadnavis.

Q: What steps should government take to convert the vision of housing for all by 2020 to reality and to boost the affordable housing?

A: The government will give priority status to affordable housing. Since the vision of housing for all by 2022 is to be realized, the government will streamline the approval process and also reduces the total cost of ownership for the end user of affordable housing.

The new government will remove major bottlenecks like land acquisitions and government clearance for the real estate sector, especially affordable housing projects. Our government wants everyone in Maharashtra to have a roof over head and hence we will do everything within the legal framework to facilitate the development of affordable housing.

Q: Will you adopt BOT policy for development?

Developmental projects should be undertaken on ‘Build, Operate and Transfer’ (BOT) basis. This is one of the ways of development. But in the last few years, some contractors have gained disproportionately out of such projects. Nothing was done in the past to augment the revenue of the state. But this will not happen again. Efforts will be made to augment the revenue of the state by proper evaluation of every project and no undue favours will be granted to any contractor.

Q: What will be your order of priority as the CM?

A: Development of infrastructural facilities, improving the agricultural productivity, industrial development, law and order, standard education in schools and colleges, besides basic facilities of water, power, road, bridge, irrigation and airport.

Q: Since you hail from urban area, what is your idea of agricultural development?

A: I am the son of farmer. I know that it is essential to improve the productivity of the farmland. Unfortunately nothing has been done by the past government. A special machinery will be set in place for this purpose. There will be proper planning for ‘Bagayati and Jirayati’ forms of farming and ample water will be supplied for irrigation. Stress will be on sprinkler irrigation which will lead to the saving of water.

Q: What is your idea of industrial progress?

A: For the promotion of industry, red-tapism will have to go. Efforts will be made to remove all hurdles in the path of industrialists desiring to set up industries which take as many as two years for establishment as of now.  No delay can be tolerated in this competitive age. Technology gets obsolete in no time and hence fast clearances will be granted to industrial projects. Decision will be taken on increasing the FSI in the industrial estate. Effective implementation of Narendra Modi’s ‘Make in India’ will be done in Maharashtra and I will put great emphasis on IT development in Maharashtra.

Q: When in opposition you had flayed the government for turning Maharashtra into debt-burdened state. How will you tackle the situation?

A: Actually, I am not opposed to seeking loans. What is important is purpose for which the loan is taken for and how it is utilized, whether assets can be created out of them. When the loan is spent on unproductive things, the state enters the debt trap. Unnecessary expenditure will be lessened; quality of official cost will be examined, and newer sources of revenue generation will be created so that the state GDP also goes up.

Maharashtra and Haryana, the two states which went for legislative Assembly elections on October 15, have another thing in common. They are among the most prominent property markets and together are estimated to constitute 30-40 per cent of the pan-India real estate universe.

While the polls might not substantially impact the property prices in the state, these could slow down policy clearances and infrastructure projects critical to real estate, say analysts. Since the elections happened just about a week ahead of Diwali, a time for the biggest real estate launches, those tracking the sector say there could be some changes and delays in new projects.

A short-term impact on real estate activity and approval processes is likely because of these elections, says Anshuman Magazine, chairman, CBRE, a global consultancy in the sector. “It is usual for project approvals to come to a standstill before elections.” he said and added that infrastructure projects in the states could also be hit, affecting real estate. A Cushman and Wakefield study put the total estimated unit launches at 172,500 across major eight cities of India in 2013. As for prime residential, Mumbai made for 17600 new apartment units in the first half of 2014 and Pune 5,000, according to CBRE data.

The study also shows Mumbai is one of the biggest chunks, constituted 2.2 million sq ft of new prime grade-A commercial supply in the first half of 2014 of a total of 14 mn sq ft across this segment in India. So, in grade-A commercial space itself, Mumbai is the primary real estate driver in Maharashtra and together with Haryana forms more than a third of the pan-India new supply.

Real estate players are a bit cautious and do not want to dampen the Diwali spirits. Lalit Jain, chairman of the Confederation of Real Estate Developers’ Association of India, told a newspaper: “In Maharashtra, the political system has no role to play on project approvals.” Niranjan Hiranandani, managing director, Hiranandani Constructions, said there would not be any perceptible change due to elections before Diwali. However, people would look forward to new policies in housing and incentives for affordable housing. Those policies would depend upon the result of the elections and who forms the new government. Many issues in real estate are governed by state laws. The actual loss to real estate caused by policy uncertainties will be clear after the poll result and how quickly the new government is able to take charge, an analyst said. “The silver lining in all this is that the real estate market is already slow, limiting the impact of elections,” he added.