The government must remove its stranglehold on land for development in order to eliminate the ‘mismatch’ between supply and demand, says Kumar Gera, chairman, CREDAI

The CREDAI convention was an enormous success. Could you provide some insights into how and why CREDAI was formed and its exact role?
CREDAI was formed because, some of us realized, in the late 90’s, that the industry was highly fragmented and there was no organized national body to represent the industry at the centre. The role of CREDAI now is to raise the image and level of the real estate industry id India as also to attend to the needs of members.

How would you say it has grown over the years, and what have its major achievements been?
Since its inception in 1999 our membership is now in existence in 18 stares with more than 3000 developers across the country belonging to CREDAI. One of the significant achievements has been the establishment of a “Code of Conduct” for the members and the fact that in the last seven years, since CREDAI was formed the central and state Governments as well as HFIs and the media have come to accept CREDAI as true representative of real estate developers in India.

What changes have occurred since CREDAI was formed? Would you say concerns and priorities have changed over time?
The biggest factors in India’s growth story is the continuing high GDP over the last three years as well as the various reforms and liberalization introduced from the early 90’s. These actions have led to a buoyant economy where the current fundamentals are positive.

What are the roadblocks to this future growth, according to you?
The road blocks to future growth for real estate are the spiraling prices and rising interest rates. In addition any downturn in the economy can very quickly lead to a downturn.

What do we need to do to encourage more FDI, and funds from various sources?
More FDI will flow into the county when government removes its stranglehold on land for development and secondly when there is greater transparency in the industry.

What would you say is the solution to the shortage of manpower and skills that various speakers at the convention referred to?
The shortage of skilled manpower is natural result of the sudden boom in the industry. The long-term solution lies in the establishment of real estate educational institutions and colleges throughout the country.

What are the priorities in your own city, Pune, and do you think enough is being done to solve problems such as inadequate infrastructure?
Pune’s number one priority and need is a proper infrastructure. Enough is not being done currently to solve infrastructure needs. However, like most Puneites I am hopeful that soon things will finally move.

Do you see spiraling prices as a correction of the previous downturn, or is it going out of hand and is not sustainable?
Spiraling real estate prices are a correction of the previous downturn and stagnation that we had experienced for several years. Real estate prices should be compared over a 10 – 12 year horizon. If the prices are viewed over such a horizon the rise is not one that can be termed to be “spiraling”.

What do you see as CREDAI’s top priorities to take the real estate industry forward now that the convention is over?
There have been various demands for CREDAI to play a proactive role in various policy issues. CREDAI’s top priority needs to be to ensure that the price rise being witnessed should be kept under control and the rise must not go through the roof. The achievement of this can only be done when the quantum of supply is not short of the demand. It is the current age-old land policies of the Stare Governments that is squarely responsible for the shortage of enabled land for development.
If the Stare Governments removed these bottlenecks enough land could be developed to meet the growing demand, which, in turn eliminate the ‘mismatch’ between supply and demand.
CREDAI’s top priority therefore, should be to convince the government to remove bottlenecks. If this is achieved it will lead to fuelling the supply side of enabled land for development resulting in the real estate boom (which impacts our GDP very significantly) continuing without any unrealistic price rise.