News & Views on Indian Real Estate

Monday, September 22, 2008

Realty Bites: Regulatory Hinderances

Towards the close of fiscal 2007, Ernst and Young and industry chamber Ficci on Indian real estate conducted interviews of the top management — chairpersons, CEOs, MDs and other key decision makers — of selected developers and fund managers of six prominent cities in the country. One of the aims of the survey was to analyse developers’ perspective about regulatory and Government affairs that hindered their growth opertunities.

It was found that while developers feel the government has shown definitive intent towards facilitating and promoting real estate by effecting several regulatory and policy changes, there still was a lot left to be desired.

Developers across the country are almost uniform in their opinion that delay in approval and clearences is the biggest regulatory challenge. Developers are in favour of a consistent long-term policy in the sector. High stamp duty across states also adversely impacts developers. Going forward, a much larger role by the government is envisaged to ensure sustained development of the sector.