Home » Business » Investors will rush to Gujarat from ‘investor unfriendly’ Mumbai:CREDAI

Investors will rush to Gujarat from ‘investor unfriendly’ Mumbai:CREDAI

Ahmedabad, 22 October 2012

Raising alarm over Mumbai and Maharashtra becoming increasingly “investor unfriendly”, developers apex body CREDAI has said the Maharashtra government’s policies will end up being its gift to Gujarat’s upcoming Gift City.

According to a report published in the Economic Times from Mumbai today, following are the main points raised by CREDAI national president Lalit Kumar Jain, who is also a leading developer in Mumbai and Pune.

-Gone are the days when investors from within the State and outside would plan increased involvement here. Now for quite some time, investors are looking outside Maharashtra.

-Latest report ‘Top 10 Emerging Business Destinations in India’ by real estate consultancy Cushman & Wakefield puts Ahmedabad on top with a whopping 39% of investments(Rs 71,270 crore ) made across these cities. In the last two years the volume of investment by various companies in these 10 cities – Ahmedabad, Bhubaneswar, Chandigarh, Coimbatore, Jaipur, Kochi, Indore, Nagpur, Vadodara and Visakhapatnam – had increased by over seven times according to a report.

-There’s every reason to believe that investors are shying away from Mumbai where real estate has become a costly affair thanks to the government’s unsupportive policies like premium on fungible FSI, restrictions on land use, increasing property tax and now the hike in land lease rates. Feedback with CREDAI from across the developer community is that things are not that good here in Mumbai. After a gap of over two years it is only now that the buildings plans are being approved selectively. Red-tapism is everywhere and despite even the government and officials admitting the need for a single window system of approvals, it is yet to be implemented.

-On the contrary, the approval system in Gujarat is very fast. So much so, unlike in Mumbai, developers in Gujarat do not have to run around for approvals. They CC (commencement certificates) hand delivered. The State has team of IAS officers manning call centres for the government and the CM monitors all.

-Gujarat is in an hour flight away from Mumbai that is bound to cause this capital flight.

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  1. VINOO says:

    If Gujarat wants above mentioned developments, then Modhvadia and company (congress) should be defeated, otherwise Gujarat will lose even what she has presently.

    • KENT says:

      MY FRIEND VINOO, YOU ARE 100% RIGHT…. All the prosperity will be gone in two -three years and GUJARAT will become just like other CONGRESS controlled states…ALL CONGRESS CONNECTED GUNDAS will rob GUJARAT , They are waiting for last ten years….JAY HIND…

  2. Eternal says:

    Based on the report on ET, it appears CREDAI has following issues:

    1) Premium on fungible FSI
    2) Restrictions on land use
    3) Increasing property tax
    4) Hike in land lease rates
    5) Slower approval process

    Premium on fungible FSI was implemented to illegal construction and helps drive the cost down for the home owners. This money goes out of pocket of realtors and hence they are complaining.

    Restriction on land use is done for development and planning purposes, you don’t want residential area in middle of industrial area and vice versa. Given that Mumbai is so densely populared already, enough land is not available to expand.

    Property Tax is intended to gain more revenue for the state and is policy decision which can be changed by voting Congress out of power if BJP / Shiv Sena agrees.

    Land lease rate has increased in proportion to land buying rate so nothing you can do about it.

    I am sure even Gujarat government will apply above conditions to realtors and prevent them from misusing the system or get any undue benefits.

    Only place where Gujarat can truly offer value is quick approval process due to able and efficient administration of Modi and team. I think CREDAI is only using Gujarat as an excuse to blackmail Maharashtra government and squeeze extra benefits.

    If CREDAI is really serious about it and approaches Gujarat government, I hope government lays out clear policies and conditions and don’t give them free ride. At the same time, assure them about hassle and corruption free, speedy processing of applications.

  3. accept or reject ! says:

    Gujarat promises and delivers.On time.
    This attracts the investors. Qualified
    educated officers under the careful eye of
    the governing body makes it more investor
    friendly atmosphere.
    I would buy this approach….

    Good luck !

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