Outstanding investments attracted by the real estate sector in AP have dropped, ASSOCHAM said today.
Outstanding investments attracted by the real estate sector in Andhra Pradesh (AP) have dropped from over Rs. 1.44 lakh crore as of September 2012, to about Rs. 1.39 lakh crore as of September 2013, thereby registering a marginal decline of about 3.2%, apex industry body ASSOCHAM said today.
The outstanding investments attracted by the realty sector across top 20 states of India dipped by about 6% in the aforesaid period, i. e., from over Rs. 15.39 lakh crore to about Rs. 14.51 lakh crore, it added.
"The real estate sector suffered grave turbulence in 2013, due to a plethora of reasons like rampant economic slowdown both globally and domestically, liquidity crunch, unstable currency, high input costs, labour shortage, high interest rates and growing inflation," according to a comprehensive analysis titled "Real Estate Sector: Outlook For 2014" conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Apart from AP, the states of Jharkhand, Haryana and Madhya Pradesh are top five states that have seen a significant decline in investment inflows in the realty sector during the year-long period between September 2012 and September 2013. Bihar, Jammu and Kashmir, Assam, Orissa and Uttar Pradesh have recorded a surge in investments attracted by the realty sector.
There has been a constant lull in the real estate sector in AP since September 2011, as the outstanding investments attracted by the realty market in the state declined by over 2%, i. e., from over Rs. 1.47 lakh crore as of September 2011 to Rs. 1.44 lakh crore as of September 2012.
Nationally, the outstanding investments in the real estate sector had increased marginally by about 2% from about Rs. 15.1 lakh crore as of September 2011 to Rs. 15.3 lakh crore as of September 2012, highlighted the ASSOCHAM analysis.
In AP, about 72% of the total outstanding investments in the realty sector were under implementation as of September 2013, while nationally, over 68% of total investments were under implementation.
However, the share of AP in the outstanding investments attracted by the real estate sector across the top 20 states of India has improved slightly from 9.3% as of September 2012 to about 9.6% as of September 2013.
Maharashtra accounts for the highest share of about 20% in outstanding real estate investments, followed by Gujarat (13%), Haryana (11.2%), Karnataka (11.1%), Uttar Pradesh (9.8%) and AP (9.6%), as of September 2013.
ASSOCHAM has also put forth suggestions to the government - a single-window clearance system to clear all projects instead of seeking approvals of myriad regulators and authorities; evolving a rational structure vis-à-vis payment of stamp duties on sale and purchase of land and housing properties; revising of the limit of interest deduction on housing loans of Rs. 1.5 lakh introduced by Finance Act 2001 to Rs. five lakh; allowing more foreign direct investment (FDI) in real estate firms to strengthen the industry in townships, housing, built-up infrastructure and construction development projects to spur economic activity, create new employment opportunities and simultaneously, to add to available housing stock and built-up infrastructure.
Some other recommendations given by ASSOCHAM to the government to bring the realty sector back on the growth trajectory include - to repeal "highly restrictive and archaic laws" of the Rent Control Act and Urban Land Ceiling and Regulation Act; the government acting as a facilitator and not as a regulator for real estate projects, more so where demand is more than supply; state governments completing the land records process and making them computerized; infrastructure including transportation, logistics, water, power, housing, healthcare, sanitation and others being taken in tandem to spur real estate development; government granting industry status to the real estate sector to facilitate bank loans and long-term finance for real estate projects; and real estate being classified as infrastructure and a priority lending sector. (INN)