India’s financial capital, Mumbai – has long been struggling with expensive housing stock; with most homes here out of the common man’s reach. But don’t just blame the builders for these ritzy prices. Policy makers and bureaucrats have to share the blame for the sheer amount of red tape and the cumbersome approval process that adds to the cost of a project. But this nightmare may soon be at an end if the government has its way. “Today when a developer buys a plot, he invests a lot of money into developing it. If he has to wait for several days to get approvals, it adds to his cost of investment. And the only way he will get that money back is by charging his consumers interest. Therefore if we reduce the number of days taken to give permissions, we can ensure that prices will come down” proclaimed chief minister Devendra Fadnavis recently, as part of his strategy to improve ease-of-doing business in the state.

Cutting the Flab: What’s in store?

The chief minister has outlined several proposals to ease building permissions issued by the Municipal Corporation of Greater Mumbai (MCGM) including halving the number of permissions from a whopping 119 to 58. Additionally, the government will also ensure that all approvals are given within a timeline of 60 days compared to timelines of up to a year earlier. No-objection certificates (NOCs) and clearances will also be given for the whole life-cycle of a project instead of a developer having to apply for approvals at every stage of a project while a certain degree of self-certification will be allowed with consultants certifying services like plumbing & electrical works.

Fewer Permissions = Affordable Prices?

The developer lobby has hailed the move and expects it to have a major impact on construction activity and prices. “If the combination of these things happens in the near future, you will see that people will be able to get approvals quickly and that means over a period of time, you will be able to get much more housing than what is available today. And that will automatically drive down prices”, says Niranjan Hiranandani, President – West of the National Real Estate Development Council (NAREDCO). However, this praise comes with a warning. “There are lots of other permissions which are still going to be taking time. For example, environmental clearance, tree NOC, height NOC and other permissions which take much more time today and will continue to do so and these do not come under the purview of this ease-of-doing business proposal” says Niranjan Hiranandani. Developers are now calling for the government to extend these proposals to civic departments such as heritage, environment and aviation in order to truly streamline the process and pass on the benefits to the consumer.

Will Proposals mean Action on the Ground?

Past experiences with streamlining the approval process had little impact thanks to ineffective implementation on the ground. This time around though, experts are betting on the government being able to push these proposals through. “These doubts come out of our own experience over a period of time, with gaps showing between the promises made by the government and the delivery on the ground. While this is perhaps still a concern today, I would still give the benefit of doubt to this new government and I am hopeful that they will be able to create a more efficient system”, says Gulam Zia, executive director of Knight Frank India.

Sources say that the government is keen on implementing these proposals swiftly and quickly. After all, the government intends to appoint a state housing regulator by March and unclogging the approval process can go a long way in helping it gain backing from the builder lobby, which has been bitterly opposed to several provisions of the law.

Nikhil Sivadas, Assistant Editor, NDTV