Uttar Pradesh to soon have single window clearance system for developers

NEW DELHI: The Uttar Pradesh state government has kickstarted the process of creating a single window clearance system for developers, a move that will significantly reduce real estate project costs in Uttar Pradesh.
A builder currently has to take 70-80 permissions through the entire project life cycle— from land acquisition to the completion of the project — from different authorities and getting permissions takes one to two years resulting in cost overruns, according to the developers.

“This will ultimately help the homebuyers as the benefit of cost cuts will be passed on to them and it will ensure timely delivery. The authority should also be held accountable if there is a delay from their side. There should be a system where a builder is required to submit documents at one place only,” said Manoj Gaur, chairman of Gaurs Group.

Apart from NCR towns of UP- Noida and Ghaziabad, the move will benefit real estate projects in tier 2 cities like Lucknow, Meerut, Varanasi, Bareilly and Jhansi, where developers have shown willingness to invest.

Last week, the Uttar Pradesh Real Estate Regulatory Authority (UP RERA) invited bids for selection of consultants for benchmarking existing policies and procedures to create a single window system of state developmental authorities.

“The idea is to bring all the development authorities under one roof and ensure clearance in a time bound manner. It will provide a one stop integrated services to real estate promoters. This will also check delays in approval and clearance processes by putting and tracking Service Level Agreements (SLAs) on each activity involved,” said Rajive Kumar, chairperson, UP RERA.

As of July 2020, 53,364 real estate projects have been registered under RERA across the country while in UP the number of registered projects stood at 2818 as of July 2020.

Developers say the need for a single window system was a long standing demand and is a step in the right direction.

“Sometimes after completing the construction, a builder has to wait upto a year for the completion certificate. There is no timeline for the builder who has to pay interest, which earlier used to get passed on to the homebuyers. Once the approvals start coming in time bound manner, developers can reduce unnecessary cost,” said RK Arora, president of Uttar Pradesh chapter of apex real estate body National Real Estate Development Council (NAREDCO).

In Noida alone, there are three different authorities that developers have to deal with along with a host of departments such as environment and fire department.

Since they can’t advertise before registering the project with RERA, a lot of time is lost between land acquisition and getting required NOCs for the registration of the project.

“The single window clearance system is a prudent move by the UP government towards the real estate sector. This will not only help us in fast tracking the projects, but let us work on a project with comparatively lesser interest amount,” said Amit Modi, Director ABA Corp.

“The benefit from reduced interest rates would be translated to the price points offered to the end-users. The immense amount of time saved from permissions and clearances can be utilised in developing better stakeholder relationships, and driving more investment towards the sector,” he added.

According to a study by property consultant JLL, about 3 lakh houses in NCR are currently under construction of 1.24 lakh are in mid-segment.

And maximum proportion (66%) of these 1.24 Lakh mid-segment under construction residential units are concentrated in Noida and Greater Noida area of Uttar Pradesh.

Ghaziabad also has a sizable proportion (22%) of under construction mid-segment units.