India's uphill battle against black money in real estate

Nov 21 2012, 12:12 IST
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India's uphill battle against black money in real estate. (Reuters) India's uphill battle against black money in real estate. (Reuters)
SummaryScandals in India's coal and telecoms sectors involving large corporate houses and politicians have rattled investors.


There is a cost of pushing the file. But what is the alternative? said Lalit Kumar Jain, chairman of the Confederation of Real Estate Developers in India (CREDAI).

For a typical residential project in Mumbai, developers need about 55 approvals from more than a dozen departments. Delays in consents add 40 percent to a project's cost, said Jain.

At least 10 developers Reuters tried to reach including DLF Ltd, Oberoi Realty, DB Realty Sobha Developers, and Hiranandani did not respond to emails, declined to comment or did not make officials available.

CREDAI backs the pending legislation that would create a single-window clearance for approvals, which it says will reduce the temptation to pay bribes. Getting consents in time would make homes cheaper by 25 percent, Jain said.

Our biggest problem is the approval process, said Jain, who is also the managing director of Mumbai-based property company Kumar Urban Development.

That is the only corruption we know of and where we are victimised and exploited. Otherwise developers are clean.

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