Maharashtra, UP, Gujarat saw significant investments in real estate

There are about 3,489 projects worth Rs 14.5 lakh crore in the real estate sector that are currently live across India, said study

GN Bureau | May 10, 2017


#Maharashtra   #UP   #Gujarat   #Real Estate   #Real Estate Bill   #Real Estate Act  
Representational image (GN Photo)
Representational image (GN Photo)

Maharashtra, Uttar Pradesh and Gujarat together account for over half of the total investments attracted by real estate and construction sector in India as of December 2016, noted a study by ASSOCHAM.

“There are about 3,489 projects worth Rs 14.5 lakh crore in the construction and real estate sector that are currently live across India,” according to the study titled ‘Construction and real estate investment: State-level analysis’.

While Maharashtra alone accounts for lion’s share of about 25 per cent in total investments attracted by real estate and construction industry in India as of December 2016 followed by UP (13 percent), Gujarat (13 percent), Karnataka (10 percent) and Haryana (nine percent).

“The centre and state governments must introduce a single-window clearance system at the earliest to avoid time and cost overruns that are impacting the growth and development of real estate sector in India,” DS Rawat, national secretary general of ASSOCHAM.

“Government should also grant industry status to the sector to counter the apathy of banks in financing realty projects. As for the sector, the companies in the real estate space must keep looking for long-term financial resources to become independent,” he said.

The study prepared by ASSOCHAM Economic Research Bureau (AERB) highlighted that almost 90 percent of construction and real estate investments are concentrated in top 10 states.

So far as the investment growth trend in this sector is concerned, the sector touched highest rate of 13.5 percent in 2010 but recorded sharp downfall till 2013 whereby it recorded negative growth of about eight percent but it picked up in 2014 to reach about three percent and again fell to (-) 2 percent in 2015.

However, the real estate and construction investments recorded a positive growth rate of 2.5 percent in 2016 as such the sector clocked compounded annual growth rate (CAGR) of (-) 0.7 percent between 2011-16.

Among states, Odisha has recorded highest CAGR of about 37 percent in investments attracted by realty sector during 2011-16 followed by UP (nine percent), Maharashtra (three percent), Kerala (1.6 percent) and Andhra Pradesh (1.4 percent) while rest all top states clocked negative growth in this regard.

It is worrisome to note that 70 percent of construction and real estate investment projects remained non-starter in India since 2013.

Secondly, significant growth has also been recorded in projects that remained under different stages of implementation i.e. from 63 percent in 2009 to about 77 percent in 2015 which moderated to 72 percent in 2016.

Among states, over 95 percent of realty investment projects are under implementation in West Bengal followed by UP (90 percent) and Punjab (88 percent).

High under-implementation rate leads to time and cost overruns. As such of over 2,300 construction and real estate projects that are under-implementation, 886 projects are facing an average delay of 39 months and about 93 percent of these projects are in the housing sector while rest are commercial complex.

More than 95 percent of delayed 886 projects i.e. 845 projects are accruing to private sector ownership while public sector ownership has only 41 such projects.

Real estate projects in Punjab are facing maximum delays to the tune of 48 months followed by Telangana (45 months), West Bengal, Odisha and Haryana (44 months).

On a positive note, while the new investment activities in real estate and construction sector have recorded negative growth between 2011 and 2015, it recorded a significant spike in 2016 (32 percent).
 

Comments

 

Other News

India’s active caseload remains below 5%, recovery rate remains above 93%

India’s present active caseload (4,43,486) is 4.85% of the total positive cases, and has been sustained below the 5% mark, the health ministry said in a bulletin Monday. The Recovery Rate continues to be above 93% as 93.68% of all cases have recovered as of date. In the 24 hours to Mon

Covid-19 too will be history one day: Dr. Harsh Vardhan

Covid-19 will soon be a “past episode”, Dr. Harsh Vardhan, minister for health and family welfare, has said, hoping that “vaccines available very soon, and the cases will significantly go down in the next few months”. “It is not the first one and definitely not

India’s reforms could support medium-term growth

The revival of the government’s reform agenda in response to the coronavirus pandemic shock has the potential to raise India’s medium-term growth rate, Fitch Ratings has said in a new analysis, while also taking note of downside pressures to growth and adding that it will take time to assess wh

Govt working towards resolving MSME issues through banking reforms: Patra

Acknowledging that much needs to be done in the banking sector, BJP national spokesperson Sambit Patra has said that the government was working on the nitty-gritties. “As far as the Indian banking system is concerned, a lot is still to be done and rest assured work is under progress. T

India’s AI supercomputer Param Siddhi makes mark on global stage

Param Siddhi, the high performance computing-artificial intelligence (HPC-AI) supercomputer established under the National Supercomputing Mission (NSM) at C-DAC, has achieved a global ranking of 63 and thus among the TOP 500 most powerful non-distributed computer systems in the world. The su

Delhi readies to contain COVID surge

A slew measures have been under way for a more effective response to the rise in COVID-19 infections in Delhi, with the union home ministry pushing for more testing as well as adding to the healthcare infrastructure. After home minister Shah held a meeting on the Delhi COVID situation on Nov



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter