Granting industry status to the real estate sector and initiation of road development plan (RDP) by the Greater Visakhapatnam Municipal Corporation (GVMC) as per the VMRDA Master Plan-2047 have remained the core demands of Credai-Visakhapatnam Chapter.
After setting benchmarks in taking up quality ventures, the chapter members are now batting for industry status in the real estate and construction sector, which contributes 16.44 per cent to the GDP and provides livelihood to thousands, the second largest after agriculture.
Credai Visakhapatnam Chapter Chairman
KSRK Raju (Sai) said the realty sector, which involves a lot of construction activity, has remained in the non-priority category. Since construction in the real estate sector is a lengthy process and owing to the restrictions imposed by the RERA in usage of the funds from the customers directly into the specific project, an alternative source of funding has become an integral part of commissioning the building projects at present. He told Bizz Buzz in an exclusive interview that due to finalisation of the Master Plan, there is no clarity on exact areas where roads will come up. As Road Development Plan (RDP) will clearly demarcate the areas and avoid confusion in the realty sector, this will help them to plan in advance for availing of Transferable Development Rights (TDR) bonds. In lieu of land to be lost, the government allows a land owner permission for an additional floor construction equivalent to the value lost in lieu of land to be lost by them.
For a long time, you have been fighting for GST rationalisation. Can you please cite some of your demands?
We want removal of the charges of landowner share of GST. If not, make the landowners liable to pay for their share of GST as they have a major share in the joint venture. We have been asking for a reduction in the GST rate as we are a major employment-provider. To encourage the construction Industry in India, the GST rate on cement may be reduced from 28 per cent to 18 per cent and payment of GST by site owners in Joint Development Agreement (JDA). Since the builder is responsible to pay GST on flats of site-owners in
JDA after getting NOC, the responsibility of paying GST should be fixed on the site-owners only after obtaining the NOC. Registration charges may be brought into the purview of GST. Previously we had an option to claim Input Tax Credit (ITC) when we purchase the goods. This had resulted in reduction in the cost of the construction material and the resultant benefit used to be passed on to home-buyers.
It seems you have issues with regard to RERA. Can you please explain?
Recognising the disparities in RERA registration fees across different States, we want uniformity in fees to ensure transparency. High and varying registration fees entail a significant financial burden on developers, particularly those operating in regions where fees are disproportionately high. This can lead to project cost escalation forcing the developers to pass on the additional cost to the homebuyers. Moreover, uniformity eliminates disparities in fees between different States and regions, ensuring that all developers face the same regulatory costs, irrespective of their area of operation. Sanctioning agencies like Coastal Zone Management Authority (CZMA), Electricity, Fire, Water Supply and other departments should be brought under the purview of RERA to avoid ambiguity in the approval system. Centralisation, so to say a single window system, will help hassle-free approvals and prevent avoidable delays. Single window system will help everyone and also ensures transparency and accountability.
What is the reason for your demand to increase carpet area for affordable houses to 120 sq. mts from 90 sq mts?
Majority of buyers are insisting on more carpet area. The cost of the flat under affordable houses category should be raised from Rs 45 lakh to Rs 60 lakh. Most of the home
buyers are unwilling to come forward to own their house because they prefer to own a house in 120 sq. mts. We also want a tax holiday for affordable houses as it is the topmost priority of every State. Tax holiday for affordable housing developers should be granted under Section 801BA and extended for some time.
interest subsidy to middle income groups under CLSS may be made a permanent feature, so as to enable all prospective customers under MIG to own their dream house.
What is your focus area?
As the cities are becoming heavily congested and availability of land has become scarce and price-wise exorbitantly high, we want the government to offer incentives for housing projects being undertaken in tier 2 and 3 towns. This will help in development of satellite townships in the periphery of developed cities like Visakhapatnam, Vijayawada, Tirupati, Guntur and Rajamahendravaram. We also wish the government to earmark certain areas for development of integrated townships to encourage people to relocate to the suburbs and outskirts. All these things will not be successful, unless the authorities ensure strict implementation of zonal plans, develop required infrastructure like underground drainage, piped water and gas supply, high-speed internet and educational institutions. Roads and flyovers with Metro Rail will go a long way to spur growth.
How do you think the completion of work on big ticket projects like Bhogapuram International Airport and Rs 21,844 crore Adani Data Park and Mulapeta Port in Srikakulam will be a game-changer in the region?
Certainly, a greenfield airport on the lines of Delhi and Hyderabad airports by infra major GMR Group will usher in Shamshabad-type development in Hyderabad in our area. We need Outer Ring Roads and a clear roadmap for taking up work on Metro Rail and a six-lane expressway from Visakhapatnam to Bhogapuram to ensure free and faster flow of traffic. This will certainly lead to a boom in the real estate sector. Already people including NRIs are evincing keen interest to invest in sites in areas near Gambhiram, Bhogapuram, Boyapalem, Madhurawada, Bheemunipatnam, Anandapuram and Tagarapuvalasa anticipating high appreciation in the coming years.
We have seen recently how a war-footing GMR Group has taken up work on the first phase of the airport project. The officials told us that their efforts are to complete the work by December, 2025.
Mulapeta Port in Srikakulam in addition to Visakhapatnam and Gangavaram Ports and the Adani Data Park at Kapuluppada with solar power generation will provide a boost to the local economy, give a big push to industrialisation of the region and tourism promotion. The projects will also provide employment opportunities to many. We want more such projects to accelerate the development process.
As it is Visakhapatnam is known for having robust industrial infrastructure with health city, several PSUs like RINL, HPCL Visakh Refinery, Hindustan Shipyard Ltd, BHEL, Jawaharlal Nehru Pharma City, Visakhapatnam Special Economic Zone, Brandix India Apparel City and two world-class ports. The city is known for its cosmopolitan culture and beautiful landscape with reasonably good social infrastructure. Hence, the real estate sector is bound to appreciate in the years to come. Already the demand for gated community apartment complexes and high-end villas is slowly catching up. With the sites allotted to five star deluxe hotels by Oberoi and Mayfair and several proposals in the pipeline to strengthen tourism infrastructure, the region is set to see an increase in demand for investments in the real estate sector.
As the cities are becoming heavily congested and availability of land has become scarce and price-wise exorbitantly high, we want the government to offer incentives for housing projects being undertaken in tier 2 and 3 towns. This will help in development of satellite townships in the periphery of developed cities like Visakhapatnam, Vijayawada, Tirupati, Guntur and Rajamahendravaram - KSRK Raju, Chairman, Credai Visakhapatnam Chapter
