High stamp duties and difficulties in land acquisition are some other issues, which need to be addressed.
Delays in project clearances have helped property prices to increase by 40 percent in India. Usually, to start a new project, 34 procedures are required to obtain clearance which takes an average time of six months.
According to the Economic Survey 2013, “India’s housing and real estate sector faces many challenges. There are 34 procedures and the average time taken is 196 days, which increases the sale value by 40 per cent,” according to the Economic Survey for 2012-13.
Quoting the latest World Bank report, the survey stated that in terms of housing, India is one among the top countries but when it comes to project clearances, it ranks 182nd.
Rapid increase in land prices, absence of a long-term funding and lending market at fixed rates, limited developer finance, the Urban Land Ceiling Regulations Act (ULCRA) continuing in some states, existing lower floor area ratio in cities, high stamp duties and difficulties in land acquisition are some other issues, which need to be addressed, said the
survey.
In India’s total GDP, the real estate sector and the housing sector contribute a share of 5.9 percent and have seen growth of 7.2 percent in the year 2011-12.
The survey also said that property prices have become reasonable during the current financial year.
“As per the National Housing Bank RESIDEX index for the quarter July-September 2012 compared to April-June 2012 (covering 20 cities, with 2007 as base year), there is a general decline in prices of residential properties in some smaller towns, while the increase in other cities is mostly marginal,” the survey added, reports . With the increase in urbanization, the demands for housing in cities have been increasing over the years.
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