Assam Real Estate and Infrastructure Developers’ Association (AREIDA) aims to continue improving business processes and support the growing market. Recent policies like the Local Area Development (LAD) and Transit-Oriented Development (TOD) are expected to drive significant growth and development in the coming years, stated Pranab Kumar Sharma, AREIDA President.
With ongoing government support and policies, there is a positive outlook for Assam becoming a major industrial state. Investors are increasingly interested, and continued supportive policies will help elevate the state’s industrial status, further said Sharma during an interview with Pankhi Sarma of Business North East.
Here are the excerpts:
BNE: Mr. Sharma, you mentioned both luxury and affordable housing in Assam. Given the recent surge in the economic class of our society, how would you compare these two segments—luxury and affordable housing?
AREIDA President: Housing, especially affordable housing, is a necessity. It’s a basic human need, and the largest demand exists in this segment. However, with the growth of the economy—both at the national and state levels—there has been a significant increase in financial prosperity. This has led to a rise in demand not only in the mid-segment but also in luxury housing, which had been relatively stagnant until recently. Today, we see growth across all segments, driven by economic progress and increased government spending. People are financially better positioned now compared to 20 years ago.
BNE: You've been in the real estate sector for several years and have amassed significant experience. From your perspective, where does Assam stand in terms of economic development?
AREIDA President: The Honourable Chief Minister has made his vision clear on various platforms—he aims for Assam to be among the top 5 states in the country. To achieve this, numerous incentives and initiatives have been introduced to enhance the ease of doing business. Assam is indeed emerging as one of the fastest-growing states, and the entire industry is closely collaborating with the government to meet these ambitious objectives.
One interesting development was highlighted during a recent meeting the Chief Minister had with the DCs (District Commissioners) from across all districts. He emphasized that routine administrative tasks, like issuing certificates, should be automated, allowing officials to focus on the economic development of their districts. Remarkably, he mentioned that he plans to assess district-level performance based on economic growth metrics, similar to how GDP is used on a national scale. This focus on growth gives us, as industry representatives, great hope and optimism for the future of Assam's economy.
BNE: What initiatives is AREIDA planning to implement?
AREIDA President: Our primary goal is to align with the government's core objective of enhancing the ease of doing business. The Ease of Doing Business Act was modified in 2016, and in 2017, the Ministry of Housing and Urban Development notified a single-window system. However, this portal hasn’t been fully operational until now. After relentless efforts on our part, the software is in its final stages, and we are optimistic that it will be operational within a week or so.
This is significant because one of the major challenges we face in the industry is the delay in obtaining approvals. Timely approvals are crucial; otherwise, we risk losing our competitive edge. We have consistently advocated for the statutory time limits mandated by law to be respected, so applications are either approved or rejected within the specified timeframe rather than being left pending.
In addition to this, through our persistent engagements with the government, I’m pleased to report that substantial progress has been made in reducing compliance burdens. The government has repealed 75 acts, amended 31 provisions, and abolished 189 criminal provisions that previously applied to our industry. These efforts to reduce compliance burdens—referred to as RCP (Reduction of Compliance Burdens)—are highly welcomed. According to the Honorable Chief Secretary, 609 compliances have been repealed, and this is a very encouraging development for the industry.
BNE: Can you name some of the streamlined processes that AREIDA has recently implemented?
AREIDA President: One of the major challenges in real estate has been the difficulty in obtaining approvals. As I mentioned earlier, we have made significant progress in addressing this issue, and we are now in the final stages of resolving it. Another key area is our involvement with RERA as a Self-Regulatory Organization (SRO). There were challenges in getting RERA approvals, particularly the registration of projects. However, through close cooperation with RERA authorities, we have streamlined this process, and now, registrations are being issued within the 30-day time limit required by law.
Similarly, building commissions also have a set time limit, and thanks to our initiatives and positive interactions with the government, these approvals are increasingly being granted within the statutory deadlines. This is a major achievement. We are also actively addressing disputes between customers, known as allotees under the RERA Act, and promoters. As the first point of contact, our role as the SRO is to resolve these disputes amicably, avoiding the need for lengthy court procedures. Additionally, whenever industry representatives face issues, we take them up expeditiously with the authorities, who are responsive in addressing genuine grievances in line with the core policy of ease of doing business.
BNE: What are your thoughts on the implementation of rooftop solar panels across buildings?
AREIDA President: The Honorable Prime Minister has launched the Surya Ghar scheme, which you're likely aware of. This initiative is designed for everyone, but one of the major barriers to rooftop solar adoption has historically been the high capital cost. However, there's now a significant subsidy provided by the Government of India, along with support from the state government and easy loans from banks. This marks a paradigm shift in the solar rooftop power generation policy, and I believe this initiative will gain substantial momentum in the coming years with such supportive policies in place.
As for the status of buildings registered under this scheme, it's still a new policy, just recently announced, and the process has begun. We're currently in a transition phase, so it's too early to provide specific figures. However, I can say that with the regulatory framework established, both industrial users and smaller households will be encouraged to adopt rooftop solar. As the policy implementation progresses, we'll soon be able to provide more concrete data.
BNE: In addition to RERA, are there any updated policies or new initiatives that AREIDA is planning to tackle natural calamities?
AREIDA President: When it comes to natural calamities, the first concern that comes to mind, especially for us in Zone 5, is earthquakes. The media often reports on cracks developing in buildings after an earthquake, which understandably raises concerns. However, it's important to understand that Guwahati has had a robust technological regime in place for decades, which has only improved over the years.
The BIS (Bureau of Indian Standards) codes are mandatory for all home builders and promoters, and these codes dictate the structural design necessary to withstand earthquakes. The design includes precise calculations for the loads a building must endure during an earthquake, and structural elements like beams, columns, and slabs are reinforced according to these standards. Guwahati has experienced about 65 earthquakes so far, some of which were quite severe, yet our buildings have performed exceptionally well. The cracks often highlighted by the media are typically non-structural, meaning they occur in the walls, not in the structural framework of the building. These cracks are allowed by law and can be easily repaired. It's important to note that creating unnecessary panic by misrepresenting these cracks is a criminal offense under the Disaster Management Act, Section 24.
As for flooding, within building complexes, we are implementing rainwater harvesting systems to ensure that water is retained within the property. This water is used to recharge groundwater through pits designed for this purpose. While we can control rainwater management within the complex, the public drainage system outside the complexes falls under state jurisdiction, and those issues must be addressed by the authorities.
Both earthquake-resistant construction and rainwater harvesting are mandatory by law, and these practices are being implemented in all recent buildings to ensure the safety and sustainability of our developments.
BNE: Every building constructed must conform to the BIS earthquake-resistant construction codes. According to these codes, what is the maximum height or number of floors that can be constructed?
AREIDA President: There is no height limit. You can construct buildings to any height as long as they conform to the codes. The science behind earthquake-resistant construction does not restrict building height, even in the most earthquake-prone regions globally, where some of the tallest buildings exist. As a building increases in height, the technology used will change accordingly—such as the incorporation of dampeners or base isolation techniques—but there is no restriction on height. The necessary technology is fully available, and buildings can be constructed to any height while fully adhering to the regulations.
BNE: Recently, we had our Union Budget, and in the last budget, there was much focus on the real estate sector. What is the current scenario, particularly for our state?
AREIDA President: We had provided a precedent on this topic, and we welcomed the key allocations made for urban development, the MSME sector, and urban housing. The Union Budget earmarked a significant figure of ₹10 lakh crore for urban housing, targeting 1 crore beneficiaries under Pradhan Mantri Awas Yojana 2. This is a massive outlay and marks the second phase of the scheme, which is the flagship and largest scheme launched in 2024. This development is highly welcome.
Additionally, there has been a focus on transit-oriented development, emphasizing high-density development along transit nodes and peripheral development as cities expand. Urban infrastructure, including sewerage, garbage disposal, and water supply, has received substantial allocations. The rental housing segment has also been given due importance, as there is a significant demand for affordable rental housing in urban areas. The government initially took up this policy in 2021, and it has now been further reinforced. Assam, in particular, was the first state in the country to notify an effective tenancy act in 2021. The government has also launched a scheme to provide rental housing for industrial and commercial workers in PPP mode (partnership with the private sector).
Another important aspect of the budget that we welcome is the restructuring of capital gains tax on real estate property transactions. The tax has been reduced from 20% to 12% for real estate, while it has been increased from 12% to 20% for shares. This shift is likely to encourage big investors to move their investments from the stock market to the real estate sector, which will bring much-needed capital into the industry.
BNE: So you're suggesting that the real estate sector has significant potential when compared to the stock exchange?
AREIDA President: What I'm saying is that stock markets deal with shares, equity, and debt instruments. In the realm of mutual funds, you have two main types: one that invests in debt instruments and another in stocks and equity. Now, there is a third type of mutual fund known as the Real Estate Investment Trust (REIT). This allows you to invest in real estate, where the fund buys and sells properties, generating returns. Over the years, REITs have provided some of the highest returns in the market, outperforming both stocks and debt instruments. This is certainly an avenue where people can invest and multiply their savings.
BNE: So, is the real estate sector becoming a new hub for investment?
AREIDA President: Indeed, it is. However, we've observed a surge in real estate prices, which is a concern for us. We aim to keep prices as low as possible to boost sales. Unfortunately, there are factors beyond our control, including high government taxes. Approximately 38% of the cost of housing goes towards various government revenues, such as GST on housing and materials, cess payments, labor charges, EPF, ESI, stamp duty, and registration fees. This substantial expenditure is beyond our control and affects affordability, particularly for the Economically Weaker Sections (EWS) and Low-Income Groups (LIG). Despite these price increases, the mid-segment and luxury segments continue to grow.
BNE: When can we expect our state to join the ranks of other major industrial states?
AREIDA President: The government is actively working on reducing compliance burdens, and significant progress has already been made. The Ease of Doing Business Act of 2016, which initially covered a few services, now includes about 250 services. My segment is expected to be included within this month. With supportive policies, we've seen major developments, such as the semiconductor industry, which would have been unimaginable 15 years ago.
The industry is looking at our state with a positive outlook, and it’s the supportive government policies that will attract further investment. Investors are primarily concerned with their earning potential; they are not here for charity. Their investment brings reasonable profit for them, while the state benefits through increased government revenue and employment generation. We welcome such investments and industries. If the current trend of supportive government policies continues, I am confident that our state will soon be among the top five industrial states.
BNE: What are your plans for the next five years?
AREIDA President: In terms of easing burdens and achieving ease of doing business, this is an ongoing effort for us. We address business difficulties on a regular basis. Looking at the growing market, recent developments have been very positive. For instance, we've seen preferences shift, with people from the Northeast choosing to buy property in Guwahati over places like Gurgaon, Noida, or even Dubai. The fact that properties of significant value are selling in Guwahati is a testament to our market's strength. This not only boosts government revenue but also benefits the 300 allied industries that supply materials for real estate. So, when the real estate sector thrives, it has a cascading effect on the broader economy.
In the next five years, we anticipate continued growth, supported by favorable policies. For example, the state government has recently introduced several innovative policies:
• The Local Area Development (LAD) policy aims to redevelop old areas like Fancy Bazaar and Pan Bazaar, offering incentives to demolish and rebuild.
• The Transferable Development Rights (TDR) policy allows landowners to surrender land for infrastructure projects in exchange for TDR certificates, which can be used to build or sold.
• The Transit-Oriented Development (TOD) policy focuses on high-density development along major transit routes, integrating residential, commercial, and public transport facilities to reduce transportation burdens.
These policies signify a paradigm shift in development and will greatly influence future growth.
BNE: What is the future outlook for the real estate sector, particularly in Guwahati?
AREIDA President: Real estate is a key sector in India, and the government has recognized its role in the country’s economic growth. India is currently ranked fifth globally in this sector. Real estate impacts over 300 different industries, including housing, retail, commercial, industrial, and various infrastructure components. The sector is growing at a rate of 15.7% annually, driven by rapid urbanization.
According to government figures, urbanization in India is expected to reach 40% by 2030. In Assam, particularly in Guwahati, urbanization is projected to increase significantly, potentially reaching 30% from the current 14-15%. By 2045, Guwahati is expected to face a shortage of 7.5 lakh households, with the population surging to 40 lakhs from the current 12-13 lakhs.
This demographic shift underscores the importance of real estate development. To support this growth, comprehensive infrastructure planning is required, including water supply, sewage, garbage disposal, schools, recreational centers, hospitals, and transportation. The government has been proactive in this regard, with initiatives like the AMRUT mission and the ATAL Mission for Urban Transformation. Additionally, the Housing for All scheme, relaunched with a substantial allocation of 10 lakh crores for 1 crore urban beneficiaries, highlights the government’s commitment.
The real estate sector’s future looks promising, with significant potential for growth. There is also an increasing middle class with disposable income seeking better properties. While demand remains high in the EWS and LIG categories, there has been a 15% growth in demand for luxury and middle-segment properties as well, indicating a broad enhancement in demand across the board.
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