Real Estate Contours of Free India

August 14, 2007	(2 votes, average: 3 out of 5)  Loading ...
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The emergence of Indian property market after Independence Day gives the true scenario of ups and downs in the Indian Economy. The contours go like this: 1950s – Government to become a monopoly provider, 1960s – shortages and inferior quality during the 1960s, 1970s, and 1980s. Finally, the government lost its hold on the economy, and gave the control in hands of private sector in 1990s. Now, staying in step with good supply, property prices in Indian metros are going through the roof, thereby crippling already suffering consumers.

At the time of Independence Day, India’s population stood at 35 crore, of which, just 14 per cent lived in urban areas. With increasing urbanization, the pressure on urban housing and infrastructure also increased. The government then decided to regulate the economy by itself.

Till 1950s, private developers were allowed to operate in cities but they were kicked out after the Delhi Development Act of 1957. And, the charge came into hands of the government agencies such as Delhi Development Authority that evolved as the whole and sole authority to develop properties in Delhi.

In the meantime, several acts were made to protect interest of general public, but they took an ugly turn. The Rent Control Act, 1958, was brought into law to prevent landlords from exploiting the tenants. However, the opposite happened and the Act twisted in favor of tenants to such an extent that it blocked all the ways for investment in rental housing.

The Urban Land Ceiling Regulation Act (ULCRA) can be looked upon as another example. It was made to cap individual holding of vacant land to 500 sq m. The law envisaged to utilize the land lying with large landowners for the residential development purposes. But, the owners did not spare any prospect to mould exemptions in the Act to their own benefits.

Then, there were the reforms of 1990s which looked forward to bring a revolution in the industrial and service sector. It also aimed at increasing income levels as well as the demand for residential property.

Let’s view the present real estate picture, where property prices in metros especially Delhi and Mumbai have shot up by 100-300 per cent, making the dream of owning a house an illusion for common man. Of the suggested ways to improve the scenario, the major ones are:

• Increasing the floor space index (FSI)
• Bringing better infrastructure facilities and connectivity to suburbs
• Free up more land from government agencies

News Published Under:   Real Estate India |