A sustained revolt by the all-powerful builders’ lobby “heavily hampered” the prospects of the Congress and the Nationalist Congress Party (NCP) in the just-concluded Mumbai civic body elections, according the alliance ruling Maharashtra.
The Congress-NCP government’s intent to bring in transparency and sanity in the realty sector led to growing resentment in the builders’ lobby, which “vented its anger” during the last week’s BMC polls, say both political parties.
The Congress in particular believes that the party, far from cashing in on chief minister Prithviraj Chavan’s “clean image”, came under attack for putting the realty sector in the wrong box.
Other factors that worked against it, the alliance says, are an average 18 per cent rise in the ready reckoner rates from January 1 during the economic slowdown and the amendments to the Development Control Regulations.
According to estimates of realty research firm Propequity, the launches of new projects last year came down by 54 per cent and the absorption of homes by 57 per cent as compared with 2010. Also on a slow track are big-ticket property sales by corporates and the metro’s government bodies that are worth over Rs 7,800 crore in value.
The real estate committee of the the Indian Merchants’ Chamber says says the developers’ lobby was “very much annoyed” with some of the recent reforms pertaining to it. “These led to delays in the commencement and completion of project apart from financial loss incurred by the realty sector,” Sunil Mantri, its chairman, told Business Standard. “Many of the upcoming projects got stuck. Eventually the consumer also suffered.”
A developer said approval for a new project takes around two years in Mumbai, as policies change frequently. “How can we then run the business,” he asks.
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The Builders Association of India accused the city municipal corporation of “gross discrimination and injustice” in the case of redevelopment of properties in suburbs under the sanctioned Development Control Rules. It would hamper and render impossible any development work of smaller-size plots in view of the open-space requirement. This treatment is in contrast to the facilities enjoyed for redevelopment projects in the island city where these rules are not in operation.
Congress leader Naseem Khan, who is minister of textiles, argues that the government had brought out revised Development Control Regulations last month to protect the interests of the city. “Maybe our combine fell short in its efforts to convince the voters that Mumbaikars will be the beneficiaries of these changes,” he shrugs.
Concurs Minister of state for housing Sachin Ahir (NCP): “What we meant by the amendment was only bringing in sanity and transparency in the realty sector.”
Congress spokesperson Janardan Chandurkar says hutment dwellers and ring leaders got under the influence of the builders’ lobby, and voted against the party. “The CM wanted to break an unholy nexus between the politicians and builders, and stayed some of the slum redevelopment projects of leading realty players,” he notes.
Another leading developer recalled that the municipal corporation only cleared the plans earlier. “Now they say it is illegal. We did not force them to clear it. It is bizarre,” he says, hoping that the uncertainty was set to end now.