RERA alone can’t get you homes: Niranjan Hiranandani

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National Real Estate Development Council (NAREDCO) saw a change of guard with Mumbai-based developer Niranjan Hiranandani taking oath as the 8th National President.

On the sidelines of the Real Estate and Infrastructure Investors’ summit, Hiranandani spoke to CNBC-TV18’s Ashwini Priolker about his priorities as president, the role of private sector in affordable housing and government policies that will impact the real estate industry.

As the newly elected president of NAREDCO national, what are your top priorities?

My top priorities are three-fold. I want to fully support the vision of the prime minister to create Housing for All by 2022. Second, the real estate industry should be rationalized. We have seen four Tsunamis last year in the form of Demonetization, RERA, GST and the Insolvency and Liquidation Act.

All these four things have certainly disturbed the industry. There is a problem of lack of demand. The business scenario has to change with one major difference — builders should make money out of affordable housing. We can look at the example of IndiGo Airlines which is a low-cost airline yet making more money than full fare paying airlines.

The third issue which is extremely important is the problem of ongoing schemes. We have almost 2 lakh incomplete houses in Noida or Greater Noida. It is our request to the government to create a special authority to solve these problems. Consumers won’t get houses just because there is RERA. Also, my objective is to convince the government to bring down the taxes on affordable housing which will enable the industry to participate in it.

The minister in charge of Housing and Urban Affairs announced a PPP policy in which for the very first time the concerns of the private sector are addressed under Pradhan Mantri Awas yojana (PMAY). What are your thoughts on this?

First, you have to understand that the government is not going to solve all the problems of this sector. The government should encourage models that will give a boost to affordable housing. Look at Hyderabad for instance, they have removed the control of Floor Space Index (FSI). Today, you can get as many affordable houses you want in Hyderabad.

Speaking about FSI, do you think the Indian cities are ready to go vertical? What about the infrastructure which will be required to support this higher FSI?

FSI has to be increased. There is no other alternative. But at the same time infrastructure has to be married to it. And the government is already working in that direction.

The minister also expressed his unhappiness over private sector’s contribution to the affordable housing sector. What do you have to say about it?

I don’t think he has to worry about it. Tomorrow, if we don’t enter the affordable housing sector some new guys will enter. It’s a big sector and somebody or the other will come into the market. Don’t worry, affordable housing will happen and NAREDCO will support it.

Lastly, when do you think the residential market will revive in India?

In the next 6-12 months, you will see a revival in the market because overall things are looking better. After the fall in Gross Domestic Product (GDP), the government is aware that it needs to do some prime pumping into the economy. The reserve bank will have to further reduce the interest rates. Overall you will see the pumping of the economy. The growth in the economy should go hand-in-hand with employment generation. The construction and housing sector will also help in job creation.