India improved its ranking for the second straight year on the back of reforms related to insolvency, taxation and other areas. India was ranked 100th in the World Bank's ease of doing business report last year. World Bank said India has further streamlined the process of obtaining a building permit and made it faster and less expensive to obtain a construction permit. It also improved building quality control by introducing decennial liability and insurance.
Arvind Nandan, Executive Director-Research at Knight Frank (India), an international property consultant, shared his views on what the government has done to make the real estate sector transparent which has resulted in the ranking for construction permits to go up and what more needs to be done so that the rankings improve further:
It is commendable that India has jumped 23 places to rank 77th in the World Bank Ease of Doing Business ranking. We broke into the last 100 last year. From last year to now, we have made much progress in the rankings.
In India, the government is putting in a series of efforts through reforms to make the economy work. Where real estate is concerned, the government has tightened the overall real estate sector with key reforms.
The Benami Transaction (Prohibition) Amendment Act came into effect from 1 November 2016 to curb the menace of black money. After coming into effect, the existing Benami Transactions (Prohibition) Act, 1988, was renamed as the Prohibition of Benami Property Transactions Act, 1988. A landmark reform was the Real Estate (Regulation and Development) Act, 2016 or RERA which protects home-buyers as well as helps boost investments in the real estate industry. Then there was the Goods and Services Tax (GST) which initially was not working optimally. This was natural given that it was a new reform but later it ensured structures were in place in a proper manner.
India has been able to stay out of trouble in financial crises unlike some countries whose backs were broken. Not only have we been able to steer ourself away from trouble but also move ahead. One of the reasons for it could be because we have held on to our conventional and conservative manner of holding on to our finances. Structurally we have been able to crank it up despite the times. All these have been effective to lead us to where we have reached today.
While the overall ease of doing business ranking has improved, as far as real estate is concerned, construction permits have had a humongous jump of 129 places. And that is clearly evident because of the information symmetry and transparency.
While as a country we have covered a lot of distance, to achieve the kind of growth rate that will propel us still higher we need to clean up the real estate processes. Though a lot of transparency has been achieved, there is a fair amount of work still to be done.
We need to speed up the number of approvals and reduce the number of days needed for full approval of projects. It is vital to clean up land records and make it available at the click of the mouse. Insurance for land is still a grey area.
Registration is still a cumbersome process. We need to make it clean and swift. A real estate firm needs information on a number of transactions taking place in the market, etc., in real time. We need to improve the system of communication flow where registration, etc, made available easily. The use of smart technology and streamlining will help achieve it.
The government must make sure that RERA is functional and operational in all states. As of now, it is not functional in all states in the country.
We would like to have a recovery in the financial markets .. whatever is required must happen. We just about hoping some kind of improvement in august when we ran into the turmoil of financial markets. Whatever it takes on part of the government to come out of the tempest the financial markets have been caught up in, it should be done.
(As told to Sulekha Nair)