Ka­mal Ra­tra & Ar. Vivek Puri, MAAS Ar­chi­tects

MAAS Ar­chi­tects

MGS Architecture - - Changing Face of Indian Architecture -

Pol­icy changes like de­mon­e­ti­za­tion and the in­tro­duc­tion of GST and RERA have had a huge ef­fect on the in­dus­try. The whole in­dus­try is in a tran­sient stage at this mo­ment. The year 2017 saw im­mense changes due to the new poli­cies and tax­a­tion along with fac­tors like TOD (Tran­sit Ori­ented Devel­op­ment), re­vised Na­tional Build­ing codes, and new by­laws in the state of Haryana.

Real Es­tate was one in­dus­try that was af­fected the most be­cause of de­mon­e­ti­za­tion. The Land trans­ac­tions took the big­gest hit with al­most neg­li­gi­ble deals hap­pen­ing in first quar­ter of 2017. The de­mon­e­tized cur­ren­cies con­sti­tuted nearly 85% of the to­tal value of the money in cir­cu­la­tion and more of the high value money was spent on real es­tate busi­ness. The pay­ments, es­pe­cially to work­ers, were only done by liq­uid cash and the sud­den re­stric­tion on with­drawals made the con­trac­tor un­able to cope with the labour pres­sure. Due to this, the mi­grant work­force was bound to flee back home, and the on­go­ing projects came to a halt. As an ar­chi­tec­tural firm, the big­gest chal­lenge at that time was the slow­down of con­struc­tion sites due to cash flow is­sues.

Due to RERA, now, a lot of work is to be done to get the ex­ist­ing and new project reg­is­tered. De­tails such as sta­tus of each project ex­e­cuted in the last 5 years, pro­moter de­tails, de­tailed ex­e­cu­tion plans, etc., needs to be pre­pared. With the time con­straint the pres­sure has def­i­nitely in­creased. (post RERA, the penalty for time over-runs by devel­op­ers is huge). The hold­ing cost for devel­op­ers has also gone up as the win­dow of price es­ca­la­tion between ‘pre-launch’ and ‘of­fi­cial launch’, which was ear­lier avail­able to devel­op­ers, is now shut. As an ar­chi­tec­tural firm RERA has lots of unan­swered

ques­tions. What if an ar­chi­tect gets a project sanc­tioned and an­other ar­chi­tect is do­ing the su­per­vi­sion or vice versa – who is li­able in case of any site is­sues? Also, what are the re­spon­si­bil­i­ties of ar­chi­tects and sub-con­sul­tants?

The real es­tate sec­tor is the largest em­ployer af­ter the agri­cul­tural sec­tor. And like all in­dus­tries, real es­tate was also hugely im­pacted by GST. Un­der the ear­lier law, buy­ers were li­able to pay taxes de­pend­ing on the con­struc­tion sta­tus of the prop­erty, i.e., whether the prop­erty was un­der con­struc­tion or com­plete. The big­gest take­away is that GST is a sim­ple tax that ap­plies to the over­all pur­chase price. The tran­si­tion from Ser­vice Tax to GST was smooth but a high rate of 18% GST def­i­nitely needs to be looked into.

In or­der to use land in an op­ti­mum way, TOD opens up dense de­vel­op­ments near tran­sit nodes through re­laxed FSI norms, thereby in­creas­ing the de­vel­opable area in the same piece of land. Since there is now an in­creased F.A.R. for the same plot, in­vestors want to avail the ben­e­fits, but this has its own chal­lenges. Struc­tural sanc­tity and ad­di­tional park­ing re­quire­ments are some of the ma­jor chal­lenges in the ex­ist­ing projects.

Square One Zirakpur

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