Telangana Government Sops to Give Boost to Realty Sector

The announcement of sops has given a boost to the sector as new projects, which have been held up, are getting ready to launch soon.

Published: 09th January 2016 04:22 AM  |   Last Updated: 09th January 2016 04:22 AM   |  A+A-

HYDERABAD:  The announcement of sops for real estate sector by the government has given a boost to the sector in Hyderabad as new projects, which have been held up for a year and a half, are getting ready to launch soon.

With the government relaxing most of the rules on common built-up area, reduction in the impact fee and non-agricultural land assessment tax, builders are expected to gain considerably.

“Due to relaxation given by TS government, the sector will come out of the deadlock kind of situation witnessed for the past four to five years. The reduction in the impact fee is expected to transform the skyline of Hyderabad, ensure ease of doing business and attract national players to the city,” said K Sreedhar Reddy, vice-president of Telangana Real Estate Developers Association (TREDA).

The relaxations were announced after many rounds of deliberations between the government and realtors and the CM okayed most of the requests. Though most of the sops announced had been agreed to by the government long ago, the announcement was delayed due to various reasons.

“The new rules and relaxation will apply only for new projects. Therefore, many builders and developers have held up their layouts and constructions. Now, they are ready to take up work,” said Gummi Rami Reddy, president of the Confederation of Real Estate Developers Association, Hyderabad chapter.

For instance, in the case of NALA tax itself more than 600 cases are pending in court where builders have held up their launches. With reduction of NALA tax all these pending cases will be cleared.

Similarly, compulsory allocation of a part of land for the housing of economically weaker sections in case of layouts with open plots, collection of value addition charges in Cyberabad Development Area, provision of 40-ft peripheral road in gated communities and others were also abolished.

Besides doing away with certain compulsory provisions, the government has also taken some decisions which will bring about major changes like allowing construction of floors above multiple portions, allowing  stilt floor in smaller plots of 200 square metres, allowing amalgamation of plots in congested areas like old city subject to the condition that maximum plot size before amalgamation shall be 100 square metres and minimum plot size after amalgamation be 300 square metres.

Major Relaxations

  • Construction of floors above multiple portions and stilt floor in smaller plots of 200 sq mt will be allowed
  • Impact fee, non-agricultural land assessment tax reduced
  • Buffer strip along Musi river reduced from 100 to 50 metres
  • No compulsory allocation of a part of land for housing of economically weaker sections in case of layouts with open plots
  • Collection of value addition charges in Cyberabad Development Area
  • Provision of 40-ft peripheral road in gated communities

‘Rising Costs Causing Project Delays’

B Seenaiah, former president of the Builders Association of India and chairman of the organising committee of All India Builders Convention being held in Hyderabad from Friday to Sunday, explains about the problems being faced by builders. Excerpts:

How is the building sector now?

The building and construction sector is plagued with various problems, the major being rising costs and project delays. As a result, several builders and contractors are unable to recover the amount they have invested in projects.

What are the reasons for it?

There are many reasons ranging from huge rise in the cost of construction material to lack of proper planning by the government and other agencies which award contracts. For instance, in some cases governments call tenders for contract works even though they do not have a budget allocated for it. This pushes the contractors into trouble.

What then is the solution?

The system of contract works needs streamlining. We need the support of the central and state governments to solve issues. There is great need for protecting the interests of the construction sector which one of the highest tax-generating sectors for the government and is also labour-intensive and creator of jobs.

How is the sector faring in Hyderabad?

Clarity is yet to emerge after bifurcation. People, builders and investors are in two minds whether to prefer Hyderabad or AP.

Isn’t construction of the AP capital an opportunity for builders and contractors?

AP capital will provide opportunities but it will take a long time for it to be developed. The government has to shift employees and administrative machinery before any construction activity can start there in real sense.

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