Bengaluru:While the state government introduced the draft Karnataka Planning Authorities (Amendment) Rules back in March, it is still pending the Governor’s clearance six months later. This has stalled realtors from getting greater leeway to add floors using the premium Floor Area Ratio (FAR) proposed in the new regulation.
In a meeting with representatives of the state government, which was helmed by Deputy Chief Minister, DK Shivakumar, the Confederation of Real Estate Developers' Associations of India (CREDAI) Bengaluru, has submitted a memorandum to push it through.
Pursuantly, speaking to media persons on Wednesday, Amar Mysore, President, CREDAI Bengaluru as well as Executive Director, Brigade Group, observed, “If the government has the will, it should happen.” Presently, realty developer have to fall back on Transferable Development Rights to construct additional floors.
He also pointed out, “Vertical development is the only way to go forward for any urban city. Other cities in India, like Hyderabad, are going 50-60 floors in terms of their vertical development, so it is time we see Bengaluru also get that.”
CREDAI also sought clarity on the TDR policy wherein planning authorities can acquire land for infrastructural projects and the landowner giving up land is compensated with a TDR certificate, a market-driven model being practised in Hyderabad, Mumbai, Delhi, Chennai. Mysore said, “If it is in the way of monetary compensation, the government is unable to make, so they have come out with this TDR policy where they give certificates in lieu of the land they have lost.”
The Bengaluru chapter, that has 230 developers on board, further called for other elements in the interest of ease of business for them. Among them were implementing a single window for obtaining no objection certificates (NOCs), reducing approval fees and standardising zoning regulation across various planning authorities. Mysore said, “We’ve asked for some amount of leeway between the NOCs. If we can get started with the construction, NOCs can follow.”
The body also lobbied for better infrastructure build-up. “For the real estate business, we would like infrastructure projects (like flyovers, metro lines, road widening) to be taken up first. But somehow, Bengaluru is always playing catchup in meeting the city’s infrastructure demand requirements,” Mysore observed.
CREDAI pushed for better connections such as getting the water-supply department to come in early, updating the city’s Master Plan and Comprehensive Development Plan, and implementing the Transit Oriented Development Policy (TODP).
Bengaluru has seen substantial price appreciation with mid-segment housing being the focus of CREDAI Bengaluru developers. With land costs being the highest contributing factor, the bulk of Bengaluru’s residential realty business is between Rs 80 lakh and Rs 1.5 crore. Emerging micro markets like Bagaluru, Sarjapura, and Varthur/Gunjur have also witnessed a price rise.
To reduce costs, CREDAI Bengaluru recommended lowering stamp duty rates for Joint Development Agreements and for Mortgage of Title Deeds which recently has been increased on ad valorem basis without any cap. The body also suggested implementing a staggered payment scheme for remittance of labour cess.
Reducing the tax on cement from 28 per cent to 18 per cent is an ask that will be placed in front of the Finance Minister during the GST Council meeting on Monday.