Giving a complete new identity to the city - based on its main economic activity and better connectivity will eventually increase the demand in real estate Gaurav Shah, Director –Ravi Group.
What is the role of real estate in India’s urban development?
The real estate sector has been the backbone of the Indian economy and a major contributor in the overall development along with facilitating economic growth. Real Estate is a vital segment of the economy and is accountable for an extensive part of its expansion, investment, furtherance of the nation’s infrastructure & major originators of trade and industry activity. It is one of the fastest growing sector of the Indian economy having large association with various other sectors and allied industries and is a means for development in a large number of secondary industries in the country. A propeller of growth for the urban development, it is second largest employer in the nation after agriculture. In the long term, growth in Indian real estate industry is expected to be driven by rise in infrastructure spending. With improved infrastructure and growth there will be more demand for commercial and industrial space and for accommodation. By initiating befitting policy measures in this sector, investments can be pulled and developers can offer housing for all by promoting inclusive growth along with lifestyle up-gradation. Giving a complete new identity to the city - based on its main economic activity and better connectivity will eventually increase the demand in real estate by uplifting the growth in the economy. So, for India’s Urban Development infrastructure plays the key role as the connectivity for new development in real estate.
As existing cities get clogged and new cities open up, what are the facilities you feel the government should accentuate on to ensure the quality of life improves and real estate gets a boost?
While establishing new cities, for up-gradation of lifestyle and growth of sector, government should concentrate on including all the facility that the smart city has along with the giving weightage to improved infrastructure. Technology has an evolutionary impact and is changing the real estate industry, escalating the economic growth. Infrastructure gives boost to real estate in terms of prices and in terms of demand. It also plays an important role in generating employment opportunities and advancing development. India being a populous country, job creation is of utmost importance for it to grow. Job creation primarily depends on a labour intensive sector which in turn depends on the investment in that sector. In order to uplift the real estate sector, infrastructure needs a boost, through creating new smart cities and generating employment. Government should also incorporate some features of comprehensive development in Smart Cities like applying Smart Solutions to infrastructure and services in area-based development in order to make it more convenient and user friendly, expand housing opportunities for all, Promoting a variety of transport options, and making governance citizen-friendly and cost effective and giving the city a new identity. With the emergence of smart cities coming into picture in order to grow the country has to develop and new cities like New York, Sweden, Stockholm can be set as a benchmark for the same.
A good deal of the city may have to undergo redevelopment what are the changes you propose in the planning norms, to ensure such proposals are skilfully addressed?
In order to make redevelopment projects viable for developers, Infrastructure is the aspect which should be given the attention to. As in today’s date what we are lacking at is better infrastructure. In the real scenario for the benefit of all, not only for the developer or government but also for the end-user or consumer, infrastructure will play a significant role. Junctions which are developed and crowded, due to unsuitable infrastructure are cluttered and congested and as a result society faces difficulties. Major hurdles for redevelopment projects today is infrastructure and hence needs attention as it works as vital catalysts for the progression of the sector.
When it comes to monetization of land and land based revenues the results are extreme, in the sense that the price point is very high in areas where sustainability is a concern and low where possibly a lot can be achieved, how can this issue be corrected?
Land Price range are high in developed areas where sustainability is the key problem and areas like outskirts of the cities prices are comparatively low where there is a potential advantage and opportunity. This vast difference in price range is due to the regulatory policies implemented by the government and should be changed which would enable us to work around this issue. As land only appreciates and the value always goes upwards with no control over the prices, it needs to be regulated. Change in the policies would definitely help us resolve the conflict.
How can private equity play a beneficial role in development of real estate? And how can the PPP model help in creation of affordable housing?
Private equity plays an imperative role - in terms of financing the whole project and helping to develop the same for a particular developer. Based on the development and infrastructure boost which is planned by government in a particular area if, Investor focuses on future prospect and prices which are going to escalate it will be beneficial in terms of investment prospect. For PPP model, in present scenario, the main obstacle is government or regulatory policies. If these norms are eased out and relaxing guidelines followed diligently it would be favourable to the sector as a whole and will be helpful for formation of affordable housing. Private sector works better in terms of profitability and productivity and it will create efficiency for government as well as for individuals from the long term perspective. FDI also gives boost to the projects in terms of liquidity. The increasing flow of Foreign Direct Investment into Indian realty sector is encouraging and increasing transparency during transactions. But the major role will be played by government policies and infrastructure for any project to sustain from a long term perspective.
