India Building Construction Permit Time Taken is 222 Days..!

A construction permit requires, among others, mining licence, tree cutting approval, borewell registration certificate, no-objection certificate to operate a genset, change of land use approval & a microwave licence.

Then there are approvals required from Airports Authority of India, railways ministry, National Highways Authority of India, environment ministry, ministry of defence, Pollution Control Board and Coastal Zone Management Authority.

Incidentally, some developers this reporter spoke to had no clue about what a microwave licence stood for.

There are, on an average, 35 permissions required only to obtain a construction permit (in some cases more than 50), which takes at least 227 days, according to the 2013 World Bank report on ease of doing business.

No wonder the report puts India at 182nd position among 185 countries on the ease of issuing construction permits.

In comparison, it takes all of 26 days in Singapore, 67 days in Hong Kong and 69 days in Mexico to obtain such a permit.

Mr. Anshuman Magazine, CMD(India), CB Richard Ellis said, "It is not that clearances are not required in other countries. But elsewhere the onus is on government officials to give time-bound permission"

Mr. Navin M Raheja, chairman, National Real Estate Development Council, "We remain so preoccupied with obtaining multiple clearances and paying multiple taxes that there is very little time left for focusing on improving quality of construction, timely delivery and research and development"

According to a KPMG report, the lengthy process of obtaining permits leads to cost escalation of 20% to 30%. And, multiplicity of taxes account for 30% to 35%of total housing cost.

"In Noida or /  Ghaziabad, you can get a mining licence only if you approach authorities through a syndicate. The deal is to forego your rights over sand that comes out of digging. Deal makers make crores of rupees by selling that sand. But, that is a small price you will have to pay to cross the first hurdle," a senior official of a Ghaziabad-based developer told BS reporter. He and scores of other officials who gave inputs for this story refused to be identified, fearing also the wrath of officials working for development authorities. "The officers who give clearances are the ones who do inspection also. We can not afford to annoy them in any way," he added.

Obtaining a construction permit is just the beginning of the story. Much bigger hurdles, requiring constant "dealing" with officials of development authorities follow, say officials associated with private developers.

"The toughest challenge for all developers is to follow building bylaws. They were written some 30 to 40 years ago. If they are followed in letter and spirit now, all developers will lose money. So, they look for entering into some kind of a deal with officials. Bigger the size of the deal, the greater the flexibility of builders to vary from bye-laws," said a builder who has projects in Ghaziabad and Greater Noida. He requested not to be identified.

A 2013 report of the committee on streamlining approval procedures for real estate projects constituted by the ministry of housing & urban poverty alleviation says: "Some stipulations (of bylaws) are so complex that even experienced technical person or architect find them hard to understand and in the process, tend to violate the laws. Some areas of building bye-laws provide scope for ambiguity, which brings in lot of discretion power vested to the authority/officer, who can play with the applicants by rejecting without proper reason or / cause delays. This paves way for collusion and corruption."

"You can get a floor added to the approved plan, floor area ratio (FAR / Floor Space Index - FSI) wrongly calculated, the leeway to convert parking slots into store rooms or converting green spaces into parking slots-officials either have the power to approve them or just overlook them if you keep them happy. All this happens because our bye-laws have become archaic," added the developer quoted earlier. He pointed out that obtaining occupancy and completion certificates is another area where officials of development authorities have chance to cut "deals".

It is not that authorities are unaware of all these flaws in the regulatory regime. The committee had observed that "most of the sanction and certification processes in building permission lack transparency & are ridden with systemic corruption at various levels.

The decision-making process of sanction / rejection is not transparent and can be arbitrary. The deficiencies in the system give enough room for foul play by fraudulent persons operating within the system, harassing applicants/ builders for 'payments'. Deficiencies in inspection and certification of building completion (compulsory signing by official concerned) also promote corruption and /  or collusion."

Src: BS

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