Hyderabad Economy and Real Estate

[Gudavalli]

Source: http://timesofindia.indiatimes.com/c...w/12182578.cms

HYDERABAD: The state government's failure to take a final decision on the controversial GO 45, issued in January last year, has brought the city's real estate industry to a standstill.

As per Greater Hyderabad Municipal Corporation (GHMC) records, as few as four applications for building residential complexes have been submitted with its town planning department in the last 13 months. The usual number of such applications, as per municipal officials, is more than 12 per year. The four projects that have sought permission, in compliance with the GO are located in Banjara Hills, Sanathnagar, Kukatpally and Gopannapally.

While these were submitted with the GHMC between August and December last year, municipal authorities are yet to sanction the plans. "Deliberations are on and a decision will be taken on them soon," said a senior GHMC official, when asked.

The government order (GO 45) was issued by the Municipal Administration & Urban Development department directing builders, constructing on properties more than one acre is size, to earmark 20% of developed land for economically weaker sections (EWS) and lower income groups (LIG) in all housing projects. While the government claimed that the GO was a move towards providing more affordable homes to the poor, it did not go down well with city developers.

Terming it "unfeasible" builders said that the directive was flawed as the number of EWS and LIG buyers in Hyderabad was far and few in number. The opposition notwithstanding, the government initially decided to implement the GO in its original form but soon retracted. Realising that the enforcement would lead to a larger crisis --of sitting on a pile of affordable homes that have no takers -- the government constituted a committee under the MA&UD department to take a fresh look at the order. "It has been several months since this body was formed, but we are yet to hear a final decision.

Developers are waiting for the revised GO to be issued so that they can submit their plans that they have been holding on to for over a year now," said C Sekhar Reddy, president, Confederation of Real Estate Developers Association ( CREDAI), Andhra Pradesh chapter.

Reiterating how the GO, if implemented in its current state, would further burden the middle-class buyers, he said, "Builders have nothing to lose in this. If they are forced to construct so many EWS & LIG units they will extract the additional cost from the regular buyers. So the government, in revising the GO, will only help the end users, not developers."

As per industry sources, not less than 40 development projects are currently on hold due to the confusion over GO 45. Builders say they will submit their plans once the government announces its final decision. Even GHMC is hopeful that the matter will be resolved soon as the drop in applications has led to a significant drop in its revenue as it collects huge amounts as permit fee from each residential project. "The GO is under consideration and we are hoping that a revised GO will be issued soon," said G V Raghu, chief city planner, GHMC.