The Hindu : Andhra Pradesh / Hyderabad News : Builders sore over new norms

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Monday, Jul 14, 2008
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Andhra Pradesh

Andhra Pradesh - Hyderabad

Builders sore over new norms

Oppose certain provisions envisaged in the G.O. 288

G.O. says they should set aside space for HUDA
Developers already hit by high material costs

HYDERABAD: Bugged by certain provisions of the G.O. 288 that has developers handing over a part of their project to the Hyderabad Urban Development Authority (HUDA) and also earmarking space for MIG, LIG and EWS, the construction industry in the city is looking at the government for some early relief.

Clearly unhappy, the industry feels the latest regulations could end up burdening the developers reeling under the impact of rise in construction material prices and struggling with shortage of labour, and also result in escalation of property prices.

The argument put forth being, when developers buy a piece of land in open market at a considerable cost and pay all taxes, why should they be made to share a slice of it with the HUDA.

A section of the builders approached the court and the government was asked to treat the petition as a representation. “Some of our fraternity have got the orders and we hope some relief comes our way,” says C. Sekhar Reddy of Builders Forum. Representatives have already met Chief Minister Y.S. Rajasekhara Reddy on the matter and Mr. Reddy says, “We also met senior officials also and are waiting for an outcome.”

The real estate industry operating in private does not receive any subsidies, relief or concessions for its projects and hence the regulation of earmarking for different economic groups should not be enforced, a builder argues. “We pay hefty taxes and fee from VAT to Impact fee, and every department associated in some way or other collects them. No relief in any form is offered to us the way it is made available to other industries and SEZs,” he avers.

Another argument being that the kind of housing suggested for EWS and LIG might not work out at all in the longer run. “Is it possible to think of a living space in 20 sq. mts as the regulations want?” asks another builder.

Measures such as these coupled with shortage and high cost of construction material could as well end up forcing the middle class further away from their dream homes.

“The loan eligibilities have come down and affordability aspect of middle class is getting affected. With regulations like these, the dream will remain unrealised for many,” observes Mr. Reddy.

Developers find it hard to digest the directive on handing over a part of the project to HUDA. “If we do not resist conditions such as these now, one day, the authority will come out with a regulation that all independent houses should give away a floor each to it,” he says.

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