Image Credits : DNA

This week, the Central Government is seems to intend the passage of Real Estate Bill in parliament, and the Cabinet is likely to approve the previous few changes that have been made after the recommendations of the select committee. According to sources, the housing ministry has incorporated approx. all the amendments which were recommended by the panel and due to that now there is no scope for political party to oppose this Real Estate Bill with an aim to protecting the interest of home buyers or other consumers in the real estate industry.

According to one of the Government official, “We are positively hopeful about the Real Estate Bill since there are many home buyers and other people in the real estate industry who are suffering from no mechanism or framework to get protect from any kind of unfair trade practice or exploitation by the real estate developers and real estate firms”. The more he added that the Cabinet has approved the changes which were mandatory as the revised bill is taken up for discussion. It is expected that new recommendations which have been accommodate in the bill will include the provision of parity in the interest payable by consumer and developer in case of any default by either.

In Presents, real estate developers only pay 2 to 3 percent interest in case of their default whereas; consumers are liable to pay about 16 to 18 percent for their default. However; on the same issue the Rajya Sabha panel had said that the interest rate payable by the promoters and the interest rate payable by the allottees should be the same in eventuality of any default by either of them. The panel was also recommended that 50 percent of payments made by the home buyers for a real estate project be kept in a separate account and it should be used for that specific project only.

However; in addition to the provision of imprisonment of up to three years proposed by the government, the committee had recommended that the clause of imprisonment for a realtor should be failing to abide by the orders of the appellate tribunal.

Lucrative offers- Combo of residential apartment

If you think that it’s impossible to own apartment in low cost or get job in the city like Mumbai, so this time you are wrong because now real estate builders are making an unusual promises as recently one of the Mumbai based real estate announced that his company is offering residential apartment in just 6.25 lakhs in Mumbai’s far outskirts with a helicopter joy ride and a job for one of the female member (from buyer’s family).

Karrm Infrastructure, which is famous for providing budget home in Mumbai, has promoting their latest project with lucrative offers on newspapers and on local radio. Their latest project is coming up at Shahapur, which is about 56 miles away in northwest of Mumbai. Karrm Infrastructure is offering residential units at seek 90 monthly payments of Rs. 7,000 rupees each and they are claiming that there are no hidden cost as well as project is as per the standard of “Vastu,” a local version of Chinese feng shui. It seems that company is seeking to tap the affordable market in Mumbai and that Cushman & Wakefield Inc. estimates has estimated the worth of company about $11.8 billion. According to Karrm, the low budget projects provides swimming pool, a hospital, school and a super market and apart from that the largest unit offered is about 202 square feet – all of one room, toilet and kitchenette.

In the metro cities like Mumbai, the demand for low-cost units is rising as PM Narendra Modi announced his “Housing for All by 2022″ scheme, however; builders prefer to construct high-end apartments in the cities like; Hyderabad, Mumbai, Delhi, but now they are struggling to clear the inventory pile-up of high-end apartments. According to Sanjay Dutt, Executive Managing Director of South Asia at Cushman & Wakefield, “Urban residential units has long been neglected in India because of certain reasons such as; high land prices, low margins in the segment and delays in getting approvals, but now with renewed focus from the state and central government, we are expecting that this segment will get proper momentum in near future”.

20 percent discount on full payment:

According to the statement of sales representative at Karrm Infrastructure’s office site, “All units will be ready in next two to three years and job offer for female member of the buyer’s family will be at food processing factory which is coming up at same region”. As per the statement of Shyamsundar Kamat, a Chauffeur in Central Mumbai, “This offer is not good enough because it’s too far from work location, and if he will buy Karrm’s units, so it could shave his five to six hours in day. The more he added that it doesn’t make sense for me because I can use my traveling time to do extra productive or non-productive work. Shahapur region is too far for those who are working in Mumbai. This is the true reality of land starved Mumbai, where the premium paid for a home near the work place is too high. But Ketan Patel, project Head at Karrm Infrastructure was not available in his Thane office and didn’t respond to requests seeking comments.

Building residential units for those who are from lower or middle class can make sense as it can help to boost the volumes in a real estate market as Indian real estate companies are struggling with the sales of residential units. In last quarter, the sales of residential units in India’s top eight property markets has fell by 4 per cent, however; the percentage of unsold inventory rose by 18 per cent, as per the research and data of Liases Foras, which estimates that it will take at least 45 to 50 months time to find potential buyers for unsold homes in Mumbai alone. It is expected that by the end of 2031, urban population in India will reach 600 million from 377 million in 2011 as per the estimation of central government, and there will be the shortage of 18.78 million residential units in urban housing segment. Now Central government is focusing on reducing squalor in modern cities and towns and due to that central government have shortlisted 305 cities and towns in nine major states of country to start building houses for affordable segment.

image credit: DNA

In the recent action, central government informed in Lok Sabha that they has closes about 62 toll plazas, which are on highways and expressways in public interest after the recovery of cost of capital.

During the period of question hour in Lok Sabha, Pon Radhakrishnan, the minister of State for Road Transport and Highways, stated that “In public interest our government has closed about 62 toll plazas on national highways and expressways after the recovery of capital cost”.

All of these toll plazas were located in Karnataka, Madhya Pradesh, Uttar Pradesh, Bihar, Gujarat,  Kerala, Andhra Pradesh, Tamil Nadu,  Maharashtra, Telangana, Chhattisgarh, Manipur, Odisha and Rajasthan. Recently, government launched a web portal to make sure that all the road users can access the information that now onwards concerning toll plazas which are on the expressways and national highways are now under National Highway Authority of India and Road Transport and Highways Ministry.

The more he added that the total revenue collected from all of these toll plazas are about more than Rs 9283.23 crore for the year 2012 to 2013 whereas; Rs 11,436.59 crore for the year 2013 to 2104 and about Rs 14,214.48 crore for the year 2014 to 2105.

However; the information also includes the required fee rates for the different sets or categories of vehicles at any of these toll plazas, as well as the information about the facilities available at toll plaza and the emergency contact numbers.

Image credits : DNA India

The Maharashtra government is planning to regulate the real estate market of the state and for this soon they will appoint a regulatory body to save the interest of the home buyers as Central Government has gave the nod to state government to frame rules and regulation to implement the Housing Regulatory Bill approved by the President and passed by the legislature. However; we are know that in 2012 The Maharashtra Housing (Regulation and development) was passed, but after that the Presidential assent came in effect in 2014.

The process of framing the rules and regulation is in the progress and there I little delay in that because Central Government had framed s similar law know as the “Real Estate” Regulation and Development Bill) for each and every state with a motive that each and every state will adopt it. But the Central government’s bill is still pending in Rajya Sabha. State Government stated that we have explained to the Centre that Mumbai’s real estate market needs are different from the rest of the country and due to that there is need for housing regulator and the provisions which we have is better than the proposals of the central law. According to Shrikant Singh, who is Principal Secretary Housing department, “Our Submission has been accepted and we are planning to implement our own housing regulator. The more he added that we have god the final approval from central to set up our new regulatory authority for Maharashtra. Currently we are in the process of rules and regulation formation after which our authority will come into existence.

The real estate regulatory authority of Maharashtra will be a quasi-judicial body which will be able to resolve the disputes that are related to the housing sector. Apart from that the previous Congress-NCP government has proposed the real estate law to ensure home buyers interests are in the safe hands. Apart from that Centre has brought a similar legislation in Parliament and they have asked the Government of Maharashtra to hold back implementation of their own law in the real estate sector. But, the draft bill of centre has gone into the Rajya Sabha’s parliamentary committee and hence the state is planning to go ahead with its own regulatory authority bill. According to Singh our consultations are on the way and our law, judiciary and finance departments are framing the rules to setup the regulator. However; he declined any comment that when they are completing the framing the process.

Smart Cities in India

Recently, CM Fadnavis informed that 10 cities of Maharashtra would compete with other states to bag the ‘Smart City’ projects which meant to get the more advanced and well developed urban infrastructure.

Maharashtra CM Devendra Fadnavis stated that there are 10 cities from our state which is being nominated for the Centre’s “Smart Cities” project and we will compete with the entries of other states to bag funds from central to develop more advanced and developed urban infrastructure. Edged out emerging towns from the developed cities of Maharashtra are in the race to bag the funds from central. However; the name of shortlisted cities are; Mumbai, Kalyan – Dombivali, Navi Mumbai, Thane from MMR (Mumbai Metropolitan region), Pune, Solapur, Pimpri – Chinchwad from Western Maharashtra, Nagpur and Amravati from Vidarbha, Nashik from North Maharashtra and Aurangabad from Marathwada.

Recently, Central Government of India, has identified development of new towns close to those cities which are well developed because its key behind the smart city initiative where central government will contribute Rs 50 crore each year towards the smart city project. According to Comptroller and Auditor General (CAG) of India there are lacks of infrastructure and basic amenities in the new emerging towns of Maharashtra and due to that soon CM will announce next plan for development, which will focus on the urban areas or Maharashtra. This report observed that out of 36 none of the town has even the basic service level benchmarks for solid waste management, sewage management and water supply, however; the audit was for the period of 2011 to 2014. According to CAG report, water supplied in 50 per cent of the audited towns are between 25 to 69 litres per day per person, however; according to government norms it should be between 70 to 70 litres per day per person. It was observed that due to loss from distribution system, treatment plans, reduced efficiency of water the problem of irregular water supply comes in existence.

Almost there is no town which found to be segrating municipal waste; the more CAG added that the numbers of towns are not even authorized by the state pollution for the waste disposal facilities. However; the CAG has also identified irregularities in the main irrigation projects in all over the state and there are many mini projects which don’t have approved master plan.