Smart Cities Mission for urban development with outlay of Rs. 48, 0000 by Union Cabinet

Union Cabinet chaired by Prime Minister Shri Narendra Modi  approved Central Government spending of about one lakh crore on urban development under two new urban missions over the next five years. The Cabinet has approved the Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation of 500 cities (AMRUT) with outlays of Rs.48,000 crore and Rs.50,000 crore respectively.

Under the Smart Cities Mission, each selected city would get central assistance of Rs.100 crore per year for five years. Smart City aspirants will be selected through a ‘City Challenge Competition’ intended to link financing with the ability of the cities to perform to achieve the mission objectives. Each state will shortlist a certain number of smart city aspirants as per the norms to be indicated and they will prepare smart city proposals for further evaluation for extending Central support.

This Mission of building 100 smart cities intends to promote adoption of smart solutions for efficient use of available assets, resources and infrastructure with the objective of enhancing the quality of urban life and providing a clean and sustainable environment. Special emphasis will be given to participation of citizens in prioritizing and planning urban interventions. It will be implemented through ‘area based’ approach consisting of retrofitting, redevelopment, pan-city initiatives and development of new cities. Under retrofitting, deficiencies in an identified area will be addressed through necessary interventions as in the case of Local Area Plan for downtown Ahmedabad. Redevelopment enables reconstruction of already built-up area that is not amenable for any interventions, to make it smart, as in the case of Bhendi Bazar of Mumbai and West Kidwai Nagar in New Delhi. Pan-city components could be interventions like Intelligent Transport Solutions that benefits all residents by reducing commuting time.

Under smart cities initiative, focus will be on core infrastructure services like: Adequate and clean Water supply, Sanitation and Solid Waste Management, Efficient Urban Mobility and Public Transportation, Affordable housing for the poor, power supply, robust IT connectivity, Governance, especially e-governance and citizen participation, safety and security of citizens, health and education and sustainable urban environment.

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Smart City Action Plans will be implemented by Special Purpose Vehicles(SPV) to be created for each city and state governments will ensure steady stream of resources for SPVs.

Further to today’s Cabinet approval, a minimum investment of over Rs. 2 lakh crore would flow into urban areas over the next five years (2015-16 – 2019-20) since States and urban local bodies would mobilise matching resources ranging from 50 percent to 66 percent. In addition, substantial private investments would be mobilized by states and urban local bodies through PPP model as required to meet project costs.

The architecture of the Smart Cities Mission and AMRUT is guided by the twin objectives of meeting the challenges of growing urbanization in the country in a sustainable manner as well as ensuring the benefits of urban development to the poor through increased access to urban spaces and enhanced employment opportunities.

Real Estate Regulatory bill Deferred by Rajya Sabha

The real estate regulatory bill for establishing a regulatory authority for the sector was deferred by the Rajya Sabha on Wednesday with opposition members insisting that it be sent to the select committee.

The bill seeks to regulate transactions between buyers and promoters of residential real estate projects through the setting up of state-level regulatory authorities called Real Estate Regulatory Authorities (RERAs).

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As per the bill, residential real estate projects, with some exceptions, need to be registered with RERAs. Promoterscannot book or offer these projects for sale without registering them. Real estate agents dealing in these projects also need to register with RERAs.

“The are not following any standard practices, they may be taking consumers for a ride… We have a noble objective of housing for all. Mere government will not suffice. For allowing private participation it is important to have some sort of regulation,” Urban Development Minister M. Venkaiah Naidusaid seeking leave of house to introduce the bill.

Congress leader Jairam Ramesh opposed the bill and said it is changed from what was brought by previous government.

“It is different from our bill, all pro-consumer provisions have been removed… send it to a select committee,” Ramesh said, and was supported by several other opposition parties.

As opposition members insisted, Deputy Chairman P.J. Kurien said the government should take a couple of days and hold consultation with others before coming back with it.

In Navi Mumbai & Thane Load Shedding May Bring Darkness in Real Estate

Old days are back again! Maharashtra Vitaran, the distribution wing of the state’s power utility is set to impose load-shedding in Navi Mumbai and Thane.  And this load- shedding is also ready to bring some darkness in real estate market in these cities.

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The state utility, in two weeks ago, had announced zero load-shedding in these cities including Pune also, thanks to good monsoon. But now, forced power cuts are back in all major cities, due to shortage of electricity. About 2,500 mw electricity shortage has brought worried situation in real estate developers’ circle.

According to a property broker from Navi Mumbai, property enquiries have dropped drastically. “Due to the load-shedding, new property buyers are looking for a power-back up services in residential and commercial complexes and very few projects come up with this facility”, added the broker. Mohan Gurnani, MD,  Moraj Builder, said,” Adequate water supply and power supply are the basic things, which are a needed expectation by any buyer. The power cuts have changed sentiments of buyers. And the change we can see in the market”.

Koushik Das, an IT professional, said,”  I had been looking for a flat in Navi Mumbai, but load shedding and lack of power-back up services in residential premises, now, I am thinking for other areas in Mumbai”.

Already, real estate market in Mumbai and suburbs is seeing a 20%-25% price correction and load-shedding may bring more worsened period in the market. “Right now, I am not seeing any concern effect on the market, but if load-shedding is imposed for a long time , then there would be some worried situation for us”, said Manohar Shroff,  Shivan Developers.

Even though, developers concern over load-shedding issue, but some of the developers are looking quite optimistic. Jitendra Mahta, CEO,  Soham Developers, said, ” Now days, most of the projects are comprised with power-supply facilities and low- budget home buyers, who can not afford to buy property in Mumbai, have no options expect Thane and Navi Mumbai”.

Load-shedding factor is not restricted to Navi Mumbai and Thane, it will also imposed in the some parts of Mumbai such as Mulund and Bhandup, which will force to buyers look for other options, said a real estate consultant.

Source :Accommodation Times 

Environment permission is not required below 20,000 m2 Construction : HC

Now, if the construction of redevelopment projects under scheme of Slum Rehabilitation Authority (SRA), dilapidated buildings and CESS buildings is involved, if the developer carryout construction below 20, 000 m2 need not require prior environment permission accorded by the Central Government or the State or Union territory Level Environment Impact Assessment Authority (SEIAA).

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The Environment Department of Maharashtra issued a circular regarding the requirement of environmental clearance for building projects, which notifies that the construction of redevelopment projects wherein rehabilitation of tenants in SRA/Dilapidated/CESS buildings was involved, construction of rehab component below 20,000 m2 was not to be considered as a violation of EIA Notification of 2006 read with OM of MoEF dated 12/12/2014 and 27/06/2013.

As Hon’ble High Court in matter of Glomore Construction Vs. Union of India, vide order dated (24/03/2014) and (18/12/2014) allowed the construction up to 20, 000 m2 of free sell component, even in residential and commercial projects, indicating no violation of EIA Notification of 2006.

In view of the above orders of High Court, Mumbai, the Environment Department claims that, proposed construction projects wherein project proponent has undertaken total construction below 20, 000 m2 may not be considered as a violation of EIA Notification of 2006 read with OM of MoEF dated 12/12/2014 and 27/06/2013.

Further, Assistant Government Pleader of High Court informed the State Environmental Appraisal Committees (SEACs) to ensure the compliance of above order of court to avoid contempt of its order.

But, further the AGP asserted that, it is important to note that by this way the indemnity is not given to the developers to carry construction under taken by project proponent. If, at the time of appraisal of the project, it is found that the construction undertaken is not fulfilling the environmental considerations, project proponent will have to comply with the direction of concern committee to accommodate environmental concerns.

Therefore, it is desirable that is such cases all environmental concerns are addressed at the planning stage only.

Registration of Gift Deed between blood relatives required No Stamp duty

Few days before Maharashtra government had decided to waive stamp duty on transfer of immovable property by the owner to an heir or a family member. The decision was announced by Revenue Minister Eknath Khadse in the Legislative Assembly. Khadse also added that all such transactions would have to be compulsorily registered with the government.

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Find the copy of Notification from below link:

http://igrmaharashtra.gov.in/pdf/GazetteSearch.pdf

e norms prevalent a 2% duty on the property’s market value (ready reckoner rate) was payable in cases where the property was being gifted to a family member, under the Maharashtra Stamp Act. In cases where the transfer of property does not qualify as ancestral property, the stamp duty payable was 5%. This is along with a stamp duty of Rs.200 on a release deed with respect to an ancestral property.

Government has issued the notification regarding the amendment in the Maharashtra Stamp Act Amendment bill 20/2015, on 24th April, 2015, as per the notification the waive stamp duty on transfer of immovable property by the owner to an heir or a family member, will be applicable w.e.f. 24th April, 2015.

2 crore Houses for Urban Poor Approves By Union Cabinet

Minister of Housing and Urban Poverty Alleviation Shri M.Venkaiah Naidu has stated that the Union Cabinet has approved construction of 2 crore houses for the urban poor in all the 4,041 statutory towns and cities of the country. He said so while speaking on the occasion of 45th Foundation Day of the Housing and Urban Development Corporation here today. He said that another 4 crore houses will be built under the ‘Housing for All by 2022’ initiative of the central government.

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Stating that building 6 crore houses for the poor of the country is a challenging task, Shri Naidu said that central and state governments need to work hand-in-hand for the success of the Housing Mission. Shri Naidu underlined the need for effective participation of public and private sector in meeting the housing needs of the urban poor and sought their cooperation.

The Minister said that the government is working on a two pronged strategy of enhancing access to housing financing in general and ensuring credit at lower rates of interest to the poor to ensure housing for all. Shri Naidu referred to several initiatives taken by the Government to enable FDI in housing sector. These include: Allowing FDI of up to 100% under automatic route in real estate projects, reducing minimum built up area and capitalization norms, enhanced tax exemptions for investments in housing, promotion of Real Estate Investment Trusts etc.

HUDCO is a PSU under the Ministry of HUPA providing technical and financial support to housing sector with special focus on the economically weaker sections and lower income groups. It has so far supported construction of over 16 million houses across the country.

Stamp Duty on Agreement for Sale prior to 10-12-1985 is Rs. 5 only

By Santosh Kumar & Sunit Gupta

By Accommodation Times News Services

After the announcement of the Stamp Duty Amnesty 2008, there are some consultants and self designated specialists who are misguiding the people b strongly advising that full stamp duty will be charged on agreement for sale even prior to 10-12-1985. Not only that they are stressing that even the registered document will also attract stamp duty. Failing which 10 times the stamp duty amount will be levied as penalty at the time of conveyance. Most of the people are very much confused because at Stamp duty office they are not accepting documents prior to 10-12-1985 contrary to advise given by the consultants. Please note there is no denying the benefit of amnesty, because all such documents are duly stamped, hence they do not need further stamping, as such the benefit of amnesty does not arise.
Our office has been receiving several telephonic clarifications, since we are the publishers of the Ready Reckoner’s for all earlier years. To clarify this doubt GLOBUS spoke to Santosh Kumar, senior estate valuer and co-author of the Stamp Duty Ready Reckoner and Market Value of Flats in Mumbai / Thane, who clarifies the doubt as under.

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The stamp duty on agreement for sale prior to 10-12-1985 is Rs. 5 only and no more stamp duty will be charged on all such documents. This point was also clarified by Dr Nitin Kareer, I.G.R. Maharashtra, during a public meeting held on 11-4-2004 at K.C. College, Mumbai. In this connection Law and Judiciary Department of the Government of Maharashtra, has also issued a clarification on 24-1-1995, the same is reproduced on backside, which is self explanatory. In view of this clarification all such documents can be annexed with the deed of confirmation on Rs. 100 stamp paper only and the deed of confirmation will be registered annexed with agreement for sale on Rs. 5 Stamp paper. There are several such documents already registered by the sub-registrar of assurance Mumbai, that can be inspected under the Right to Information Act. In case of difficulty one should not hesitate to contact I.G.R. Maharashtra, Pune.
The agreements for sale prior to 10-12-1985 are classified in two groups. One that is registered and another one not registered. As such these agreements will be treated differently at the time of conveyance in favor of the society. Here it is necessary to clarify that stamp duty was applicable even prior to 10-12-1985, but there was an option for payment at the time conveyance. However, for conveyance executed up-to 16-3-1988, residential flat up-to 650 sq ft carpet area was fully exempted from stamp duty and area up-to 1000 Sq ft was exempted up-to 60% of the stamp duty. Because of this provision there is a general notion that there was no stamp duty prior to 10-12-1985.

Now at the time of conveyance, stamp duty liability of all the present members must be cleared. For the liability of registered agreement on Rs. 5 Stamp paper, prior to 10-12-85, the market value (not agreement value) as on the date of agreement will be considered, as purchase price agreement value only, because market value concept was not there at that time. The document which is not registered will be valued as per present market value, subject to depreciation, and stamp duty will be charged, in all the cases, as applicable today.

Regarding Stamp Duty on documents executed on 10-12-1985 and there after, all such documents must be registered after paying the stamp duty, failing which penalty at the rate of two times (not 10 times) of the deficit stamp duty will be charged. During amnesty this penalty is maximum Rs. 1000 only. At the time of conveyance they will not be required to pay any duty again, against their respective flats.
Comparative chart of stamp duty liability on agreement dated 1981 is as per Table-B.
From this example it is clear that if the document is registered, stamp duty will be Rs. 2,200 only against Rs. 1,29,000 for non registered document.

The Amnesty has come primarily to facilitate deemed conveyance of the Co-operative Housing Society, for which it is necessary that all the members of the society must clear the Stamp Duty liability of their respective agreements. Since there are many members who have not paid their share of Stamp Duty, this is an opportunity to clear the same at a normal penalty for everlasting peace.

War offing in Housing Finance

Housing finance war is in offing with new players wanting to explore new markets, old foxes are sustaining their brand and connection within the industry by pumping in funds through venture capital and asking for monopoly. New entrant like Tata Capital, L&T Home Finance, Relaince Home Finance and few NBFC also into foray to capitalise housing finance market.

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The recession in the industry and huge opportunity makes housing finance a lucrative business. Interest rates and subvention schemes have made the war more deadly. SBI, one of the old player now wants real estate brokers to become its agent and bring in the business where as ICICI still banking on tie-ups with builders.

In all, the customers are likely to get advantage of the home finance products and Real Estate industry as whole.

Affter the RBI rate cut Banks Have Reduced their Lending Rates

Reserve Bank of India’s initiative to cut repo rates for two consecutive monetary policy has proven beneficial for home buyers, as following the rate cut almost every leading banks and housing finance companies have reduced their interest rates lending rates and home loans.

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With effect to the rate cuts banks and HFCs have reduced their rates by 15-25 bps. State Bank of India, HDFC lowered their rates by 15 bps, SBI is providing a rate of 9.85 per cent to women home loan borrowers and 9.90 per cent for other borrowers, whereas ICICI Bank reduces it by 25 bps at rate of interest of 9.90 per cent.

Axis Bank lowered interest rates by 20 bps to 9.95 per cent home loan interest rate, while Kotak Mahindra Bank announced 15 bps cut in the base rate their current rate is 9.85%, Lakshmi Vilas Bank announced cuts of 15 bps. United Bank and Union Bank of India  have lowered their base rates by 25 bps each.

Even small housing finance institutes have announced rate cuts, Indiabulls Housing Finance (IBHFL) reduced interest rates of its home loans by 20 basis points to 9.90% and Sundaram BNP Paribas Home Finance has also announced a reduction of 20 basis points in its prime lending rates.

The March month consumer price index-based inflation (CPI) stood at 5.17 percent from 5.37 percent in February 2015, the CPI eased to a three month low. The experts predict this can lead to a further announcement for rate from the central bank.

In a statement Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII), had asserted that, “Inflation has in declined when compared to the previous month, This should persuade the RBI to resume its rate easing cycle to support growth without being too concerned about the impact on inflation.”

If the RBI implements further rate cut in the next monetary policy announcement more banks and HFCs can follow the motion and reduce their lending rates.

By March 2016 Indian Market will Be Improve Fitch Assumes

Global rating agency Fitch in a report claimed that property market in India is likely to be improved by the end of March 2016, following the upturn in the country’s investment and reduction in interest rates, they also mentioned that this will provide relief to the debt-ridden developers.

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“The property development sector (will) be a key beneficiary of reductions in housing loan interest rates by several domestic banks in April 2015,” the agency said, adding that they would also boost credit growth.

Further they added, after Reserve Bank of India’s initiate to reduce the key policy rate
Besides, the Reserve Bank has reduced the key policy rate by 0.50 per cent since January, prompting commercial banks to cut interest rates for home loan and other borrowers. Many banks have reduced their interest rates on home loans.

“We expect property developers with a greater exposure to the middle and lower income segments to benefit more from lower domestic interest rates,” it said, adding that developers with a greater mix of high-income customers, such as Lodha Developers and Indiabulls, will be less impacted because their customers are less sensitive to market interest rates.

Both the companies, it said, would meaningfully reduce the portion of debts by end-2016.

The rating agency observed that “the process of reducing leverage (debts) stalled in 2014 due to weak sales and slower cash collections on properties that were sold towards the end of 2014 and in early 2015, as developers introduced easy payment schemes to stoke demand.”

Earlier in the month, Fitch raised its forecasts for India’s GDP growth to 8 per cent for the current fiscal, up from 7.4 in per cent in 2014-15, and 8.3 per cent for 2016-17.

Fitch estimates that around 20 per cent of the sector’s sales over the last two fiscal quarters were financed by easy payment plans and observed “the longer cash collection cycle will continue to weigh on developers’ balance sheets in the near term.”

Sanction of Building Plans are now Leads by Maharashtra

Maharashtra leads the list with 7 of its urban bodies going online followed by Kerala with five. Total 27 urban bodies including municipal corporations and urban development authorities have put in place Online Building Plan Sanctions that help in reducing the time taken for according necessary approvals. This was informed by the Minister of State for Urban Development Shri Babul Supriyo.

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Municipal Corporations who have done so include those of : Greater Mumbai, New Delhi Municipal Council and Municipal Corporation of South Delhi, Pune, Pimpri-Chinchwad, Coimbattore, Indore, Nagpur, Solapur, Amravati, Thiruvananthapuram, Kollam, Kochi, Thrissur, Kozhikode, Ujjain, Gwalior, Ulhasnagar, Hubil-Dharwad and Lavasa.

The Development Authorities to have done so are : New Town Kolkata Development Authority, Chennai Metropolitan Development Authority, Haryana Urban Development Authority, Bhubaneswar Development Authority, Hyderabad Metropolitan Development Authority and Jaipur Development Authority.

Shri Babul Supriyo further informed that the Ministry of Urban Development has advised the state governments to streamline the building sanction procedures so as to accord clearances in a month’s time.

Draft Development Plan 2034 scrapes by govt after observing huge lapses & flaws

After the huge uproar and tiff opposition government of Maharashtra finally took a decision to scraped Development Plan 2034 prepared by Brihanmumbai Municipal Corporation (BMC). The draft DP was facing objections from citizens, NGOs, social activists, political parties since, long time. As many flaws were observed in the draft.

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Hence, the cabinet headed by Chief Minister Devendra Fadnavis today took decision to scrap the draft DP, told by an official from Urban Development Department. Government had received huge amount of suggestions and objections regarding the DP for citizens. The objections received particularly referred to reservation and floor space index (FSI), omission of heritage buildings and existing land use.

Also the panel constituted by CM for reviewing draft Development Plan headed by Chief Secretary Swadheen Kshatriya observed some major flaws and lapses in the draft.

According to the officials in UDD, there were many flaws in the DP and many suggestions and objections were received from the public. Rectifying them would be a long process and time consuming. As per the legal processor hearings are conducted for suggestions and objections about the plan and then mistakes are fixed.

During the cabinet meeting Fadnavis said that looking at the huge amount of suggestions considering them all rectifying the draft would consume ample time, so the cabinet decided to scrap the draft DP 2034 and ask BMC to draft new plan.

DP had proposed increase in Mumbai’s floor-space index (FSI) considerably and also opened up the until now protected south Mumbai for utilisation of transfer of development rights (TDR) as floating FSI. The overall phenomenal increase in bulk FSI was linked to proximity to mass transit modes but not indexed to provision of physical and social infrastructure.

Six Major Cities Has Development Of 6 Metro Rail Projects

Urban Development ministry reviewed the 6 Metro rail projects going on across the country, construction work in respect of Ahmedabad Metro Rail Project has begun within three months of the project being sanctioned by the central government with the Special Purpose Vehicle for execution of the project, MEGA (Metro –Link Express for Gandhinagar and Ahmedabad) Company Limited commencing work for construction of 6 km. Viaduct between Vastaral Gaam and Apparel Park. The Rs. 10,773 cr project envisages 37.66 km of Metro Rail with and elevated portion of 31.43 km and underground portion of 6.33 km.

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Ahmedabad Metro Project will have an East-West corridor of 20.53 km between Thatlej Gaam and Vastrapur Gaam including the underground portion and fully elevated North-South corridor of 17.23 km between APMC and Motera stadium. There will be a total of 32 stations.

Shri Madhusudhan Prasad, Secretary (UD) during the review on Friday last has asked the six Metros being implemented on 50:50 basis to ensure that there are no time and cost overruns. He said that infrastructure projects are top priority for the government and they are being monitored by the Prime Minister’s Office.

Kochi Metro informed that 51% of work has been completed on Reach I from Aluva to Maharajas and 17% of work on Reach II between Maharajas and Petta. 4883 of 5693 Piles, 731 of 1416 Piers and 862 of 2751 Girders have also been completed. Financial progress has been reported to be 34%.

In respect of Bengaluru Metro, physical and financial progress of about 92% has been reported. The entire network of 42.30 kms., in Phase I will be complete in all respects by December this year of which 38.30 km. would be operational for public service and the balance 4 km would be ready for testing and commissioning. This Metro has a North-South corridor of 24.20 km between Puttenahalli and Nagasandra and East – West corridor of 18.10 km between Mysore Road and Baiyyappanahalli. Three Reaches with a total length of 17 km with 16 stations have so far been commissioned.

Regarding Chennai Metro, Stage -1 comprising 7 stations and Viaduct of 10 km is set for revenue operations soon. Commissioner of Metro Rail Safety has carried out Rolling Stock inspection for this stage in the first week of this month. Out of the 42 train sets required, 9 from Brazil and 12 from Sri City, Chittor (AP) have been received. Regarding other four Stages, works are in progress.

Nagpur Metro has reported completion of demarcation of alignment on Airport –MIHAN , Automative Square to Zero Mile and Prajapatinagar – Dosar Vaisya Chowk sections amounting to  55% of total alignment. DMRC has been assigned the Consultancy work of preparation of bid document for appointment of General Consultant and preparation of Design Basis Report. RITES has been tasked with preparation of bid document and bid process management for appointment of execution agency for the priority section between Airport and MIHAN and bid document for appointment of Detailed Design Consultant and for construction of Viaduct between Airport and Sitaburdi.

DMRC reported 70% progress in civil works and overall physical progress of 57% in respect of Phase-III Project and financial progress of 40%. This Phase is scheduled for completion between May, 2015 and December, 2016.

Second Homes Demand Growing

Second Tier City homes concept is fast growing trend in realestate sector in the country. Emergence of second homes have benefitted thesmall towns near the metro cities and the concept have been responsible in suchregions. Pune, Panvel, Alibaug , Lonavala,  Shahpur and Wada are seeing faster developmentof second home projects. These projects are not only being developed in Maharashtra, but also in Another Metro Cities too witnessing increased activityin second home projects. Second homes also called weekend homes has always beenaround but was mostly restricted to the wealthy people. As the day-to-day inmetro cities is getting hectic and stressful, people want to spend his holidayand relaxation with increasing affluence on the one hand and growingrealization that there is a need for a relaxed lifestyle at least on weekends,the concept of second homes appears to be gaining popularity. More and morepeople seek for such second homes, which are located in beautiful surroundings.These second homes are often located in hilly areas or other such areas whichcan provide pleasant ambience, serenity and tranquility. In our country manyplaces near metro-cities have developed and in process of development as secondhomes or holiday homes.

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Modi Goverment Should Re-Visited Some Clauses , Regulatory Bill is Postive

New recommendations on the Real Estate Regulatory Bill made by the HUPA ministry have been sent to PMO for approval, and the cabinet has approved of the same, said Niranjan Hiranandani, MD, Hiranandani Constructions Pvt. Ltd. (HCPL). “Now, it will be tabled in Parliament for passing the Bill, making it an Act,” he added. “This is a positive step and will bring in transparency to the real estate sector,” said Niranjan Hiranandani, adding that the Bill will bring about a common regulatory platform for all stakeholders in the industry. “Well, almost all, as the local self government bodies have been left out of the ambit – this needs to be re-visited,” he said.

“I expect ‘positive sentiment’ as the reaction of home seekers to the Bill. The new recommendations have made it mandatory for states to set up regulatory bodies within one year of the Bill’s enactment while also setting up a web-based online registration facility within a further period of one year from setting up of the bodies,” added Niranjan Hiranandani.

On the likely impact of the new recommendations, Niranjan Hiranandani said the resultant transparency would attract foreign investors. “The Real Estate Regulatory Bill has the potential to increase transparency levels in the Indian Real Estate sector, which will result in instilling more confidence among global investors, and providing better access to structured capital for Indian real estate,” he pointed out.

“Having said this, there is an issue which needs to be addressed. While the amended Bill reads ‘positive’ in terms of inducing transparency and better governance in real estate, the moot point remains non-inclusion of local self government bodies within its ambit – the slow approval processes by government agencies are major contributors to project delays,” said Niranjan Hiranandani. “I hope this aspect gets due attention, and that the issue gets resolved. One option could be developers getting a chance to appeal against any delay in approvals like occupancy certificates on part of sanctioning authorities to the Regulator,” he added.

The move to include ongoing projects that have not received completion certificates so far under the purview of the Bill is also unfair in some respects – we expected project registrations to have been ‘prospective’ and not ‘retrospective’, said Niranjan Hiranandani.Niranjan Hiranandani mentioned the impact of provisions applicable to projects which have not received an occupation certificate (OC) – any such building needs to be registered under the Bill, Hiranandani said, pointing out that a large number of buildings in the country do not have an OC. “There is no concept of OC in some parts of the country,” he said.The other issue where he feels there is a need to ‘re-visit’ the Bill is the aspect of ‘prison term’ among the various forms of penalty. “A ‘prison term’ is draconian,” said Niranjan Hiranandani. “The Bill says that failure to register a project will cause the developer to attract a penalty of 10 per cent of the overall project cost, and an additional penalty of 10 per cent and/or a three-year prison term in case of continued non-compliance. Penalty should be commensurate with the error committed; the issues are civil in nature, not criminal which makes the aspect of a ‘prison term’ draconian in nature, and it needs to be re-considered,” said Niranjan Hiranandani.The Escrow Account aspect is one that will create new challenges as regards funding arrangements, said Niranjan Hiranandani. “Developers will now have to compulsorily deposit 50 per cent – or such lesser percentage as notified by the appropriate authorities – of the amounts realized for the real estate project from buyers, in a separate (escrow) account, within a period of 15 days to cover the cost of construction. The real estate industry is already cash-crunched, and for the developer community, need for funding will surely go up. Detailing, and we will have to study how this clause pans out in times to come,” he says.The other aspect of the Bill with the new recommendations which Niranjan Hiranandani found positive was that of being the sole option for redressal of grievances. “The Bill, in its initial form, had positioned itself as the sole course of action for redressal of grievances by customers, with no recourse to other consumer forums. This clause has been done away with in the version that the cabinet has cleared, so recourse can be sought in consumer courts and other forums as well. This will reduce the burden which would have fallen upon the Regulator, by sharing the grievance redressal with other forums.“I expect the Real Estate Regulatory Act to facilitate an organized and transparent real estate sector. I also look forward to a single window and time bound clearance system as some of the positives resulting from the same – hopefully, also the demand for recognition as an industry. This would make it possible for the industry to borrow funds at competitive rates, which will help rationalize property prices,” concluded Niranjan Hiranandani.

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Naidu & Suresh Prabhu call for speedy clearances for Metro rails considering safety norms

Minister of Urban Development Shri M.Venkaiah Naidu today expressed concern over delays in according safety clearances for Metro Rail projects resulting in non-utilisation of such projects built with substantial investments.

Naidu reviewed the commissioning of some Metro projects which were completed sometime back and still not put to use for want of safety clearances. Minister of Railways Shri Suresh Prabhu, Chairman of Railway Board, Secretary (Civil Aviation), Secretary (Urban Development), Chief Commissioner of Railway Safety, CMD of Delhi Metro Rail Corporation, former CMD of DMRC Shri Sridharan and concerned senior officials participated in the discussions.

Venkaiah Naidu and Suresh Prabhu asserted that metro rail safety cannot be compromised but at the same time clearances should not be delayed. Both the ministers called for measures to ensure timely decisions.

Naidu noted that Jaipur Railway has sought safety clearance as early as in August 2014 and is yet to be given the clearance. Similarly, Chennai Metro has sought rolling stock clearance in August, 2014 which is still due.

During the discussions it transpired that on account of rapid expansion of metro rail services in the country, there was a need for a separate Safety Certification Agency for Metro projects and the same should be examined in detail. Chairman of Railway Board stated that Railway Ministry would have no objection for creating such a mechanism. Civil Aviation Ministry, the nodal ministry for railway safety Informed that a proposal has been moved for creating two more posts of Commissioners of Metro Safety as against only one at present.

Venkaiah Naidu has asked all the concerned to meet again shortly for firming up the measures to be taken for ensuring timely safety clearances for Metro projects.

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Committee set by CM observed some major errors in Draft Development Plans,

The new committee set by Chief Minister Devendra Fadnavis for reviewing the graft development plan for Mumbai found some major errors and loopholes, which needed to be rectified. On the basis of further committee report a final decision on whether to scrap the plan would be taken.

Fadnavis, said, “The three member committee headed by Chief Secretary Swadheen Kshatriya has observed some major errors in the blue-print. They will again fully view the plan and take a decision within 15 to 20 days. The government is open-ended on the matter.”

The CM said in the state legislature assembly, “The draft development plan has errors in the land use maps. The plan has not completely taken the heritage list of 1995 into consideration. While classifying ‘no-development zone’ for residential purposes, the DP has not kept sufficient reservation for public services.”

He added, “Prima facie, the appointment of the consultant and the changes therein has been done following all due process in accordance with the law.”

The CM also said that a detailed discussion was necessary before reserving vacant spaces in Aarey Colony for various purposes. With regard to landmark sites such as Haji Ali, Jehangir Art Gallery, and Chhatrapati Shivaji Maharaj Vastu Sangrahalay, Fadnavis said there were serious drafting errors while indicating reservations and also complaints about road widening.

He pointed out that, “There are reservations shown even on land where the BMC itself has given permission for development.” Besides, information provided by the civic body and data from sources also showed many shortcomings, the chief minister added.

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SBI, HDFC and ICICI lowers lending rates cheaper home loans Excepted

Home loan buyers may be soon benefited by lower interest rates on home loan, as lower their lending rates, State Bank of India (SBI) and HDFC Bank cut their base rates by 15 bps each, and ICICI Bank, by 25 bps, as RBI Governor Raghuram Rajan, blamed banks for not cutting their lending rates, even after two consecutive rate cuts by Central Bank.

During tomorrow’s monetary policy review by Reserve Bank of India’s (RBI) Governor, he kept the repo rate, at which the central bank lends to banks, unchanged at 7.5 per cent on fears of unseasonal rains impacting food prices.

While reviewing the policy he said, “There has been very little transmission from rate cut so far, we are waiting to see transmission take place. I have no doubt that this will happen. If it happens sooner it is better for the economy.”

The rate cuts on interest were announced immediately after the monetary policy announced, though many bankers were unenthusiastic regarding the rate cut.

The cash reserve ratio, which is the amount of deposits parked with the central bank, will remain at 4 per cent. Bank rate has also been retained at 8.5 per cent.

“I do not see an environment where credit growth is tepid, banks are sitting on money and their marginal cost of funding (has) fallen, the notion that it hasn’t fallen is nonsense, it has fallen,” Rajan said.

After his announcement and plain-speaking, leading bankers including SBI Chairman Arundhati Bhattacharya initially maintained that it takes time to lower the lending rates, which could happen in two or three months.

Later, SBI took the lead in effecting the rate cut, followed soon by HDFC Bank, whose CEO Aditya Puri had also hinted earlier in the day that it would take some time for rates to be cut by the lenders.

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