Challenges Opportunites

8/12/2019 Challenges Opportunites

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APRIL 2014A Cushman & Wakefield Research Publication

CHALLENGES &OPPORTUNITIES FORTHE HOUSING SECTORIN URBAN INDIA


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Contents

INTRODUCTION 2

URBANIZATION AND ITS IMPACT ON

HOUSING 5

DOMESTIC CASE STUDIES 12

INTERNATIONAL CASE STUDIES 17

RECOMMENDATIONS & CONCLUSION 22


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Urbanization Facts

Indias rate of urbanization was last recorded at 31.1%; much lower than China,

Indonesia, Brazil and Mexico

Presently, urban India is home to 377 million people

Urban India is expected to house 600 million people by 2031, an increase of 59% from

2011

Indias urban housing shortage is around 19 million as per C&W Research's estimates

India ranks 134th among 137 countries; has the worlds most unclean air

In India, slum population in 2011 was 66 million; projected to be 105 million by 2017Indian cities are deficient in basic amenities such clean drinking water, sanitation and

lighting facilities

Public transport accounts for 27% of urban transport in India. Indian roads are already

choked. Journey speeds in India is set to reduce by more than 50% by 2040

Source: Census Data 2011, Planning Commission, World Bank

1


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INTRODUCTION

Urbanization plays a crucial role in the economic development of

any nation. History bears testimony to the fact that urbanization,

in most cases, has accompanied economic growth because it is

characterized by modernization, industrialization and sociological

development. Because of these linkages, it is believed to be a

precursor to economic prosperity. It is a well acknowledged fact

that India and China (two countries with the worlds largest

population), backed by strong economic development and growth

will drive shifts in the world economy. If India has to live up to

this expectation, there is little room for error from here on.

Planned urbanization strategies will have to be core focus and

plans must be executed.According to the 2011 census, India hasa population of 1.2 billion citizens; 31.1% of the population or

around 377 million people reside in urban agglomerations; this is

not as high as some other developing countries and leaves

significant headroom for rapid migration in the future.

India: Rural Urban Share

89% 83%72% 69%

11% 17%28% 31%

1901 1951 2001 2011

Source:Census 2011

Urbanization: India vs. Other Developing Nations

45%

54%

31%

78%

87%

China Indonesia India Mexico Brazil

Source:12th Planning Commission

India: Population Growth Trend

1.211.03

0.85

18%

22%

0%

5%

10%

15%

20%

25%

0.00

0.50

1.00

1.50

2011 2001 1991

Billions

India -Population % Change

Source:Census 2011

Although the % share of urbanization is gradually increasing, India

ranks low as compared to other developing nations.

APRIL 2014

A Cushman & Wakefield Research Publication

Rural Urban

According to the Planning Commission, urban India is going to be

home to 600 million people by 2031; an increase of 59% from

2011. Clearly, India is a country on the move, but the question is

whether Indian cities will be prepared to accommodate such an

influx of population whilst providing basic and quality amenities

to its dwellers.

The core problem with Indias urbanization lies in the fact that it

has barely paid attention to urban transformation so far.

Urbanization has taken place in a largely unplanned fashion. Life

in metropolitan cities means wading through congested roads

and heavy traffic, suffering from pollution and compromising on

living standards. Studies conducted so far on urbanization in India

reveal alarming facts; evidences which exemplify the truth that

India must now wake up and take measured steps towards

sustainable urban development.

According to a McKinsey report titled Urban Awakening,

India fails to meet basic standards of quality living when

judged by parameters such as available water supply, public

transportation, open spaces and parks, sewage and solid

waste treatment.

Rapid urbanization has caused wide spread environmental

degradation in the country.Yale Center for EnvironmentalLaw & Policy presented a study at Davos recently which

stated that among 132 countries, Indias air is the worlds

unhealthiest, beating China, Nepal and Bangladesh.

India has failed to provide urban dwellers basic needs such as

housing. In 2012, the Ministry of Housing and Urban Poverty

Alleviation (MHUPA) stated that there is an under-supply of

18.78 million housing units in urban India, of which, nearly

10 ALARMING FACTS ABOUT URBANIZATION IN

INDIA


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Drainage Connectivity Drinking Water Source

Lighting Source Latrine Facility

Closeddrainage : 45%

Opendrainage : 37%

No

18%

drainage :

Best Practice: 100% Closed Drainages

Tap Water : 71%

Well : 6%

Hand-Pump : 12%

Tubewell/Borehole : 9% Other Sources : 2%

Best Practice: 100% from Tap Water

Electricity :92.7%

Kerosene : 6% Other Sources : -1%

Best Practice: 100% Electricity

Within

81%

Premises :

Not Within Premises : 19%

Best Practice: 100% Within Premises

Source:Census 2011

CHALLENGES &

OPPORTUNITIES FOR

THE HOUSING SECTOR

IN URBAN INDIA

Source:Census 2011

Source:Census 2011 Source:Census 2011

95% affects the Economically Weaker Sections (EWS) and

Low Income Group (LIG) of the urban population.

People who belong to the EWS and LIG sections have no

access to formal housing finance. Several of them earn daily

wages and live in slums. The 2011 Census enumerated that

nearly 65.5 million people reside in slums in Indian cities

(13.9 million households). Slums proliferate in almost all

metropolitan cities in India.

As per 2011 Census, 70.6% of urban population is covered by

individual water supply connections, compared with 91% in

China, 86% in South Africa and 80% in Brazil. Duration of

water supply in Indian cities ranges from 1 hour to 6 hours,

compared to 24 hours in Brazil and China and 22 hours in

Vietnam.

There is a coping cost for inadequate infrastructure. For

instance, due to inadequate supply of water, consumers often

end up paying significantly more than the average price of

water. In a MoUD (Ministry of Urban Development) study in

2010, none of the 483 cities studied had healthy and clean

drinking water.

The MoUD study in 2010 stated that based on a sample of

87 cities, under business-as-usual circumstances, in 20 years,

the expected average journey speeds would decrease from

17-26km/hr to 6-8km/hr.

Rapid population growth and urbanization will also have a

dramatic effect on our environment. In January 2014, the Yaleth

Environmental Performance Index ranked India 174 out of

178 countries on air pollution. This report was presented in

the Davos Economic Forum. India beat China, Sri Lanka,

Nepal and Pakistan to become the country with the worldsmost unhygienic air.

According to Indias Central Pollution Control Board, in

2010, particulate matter in the air of 180 Indian cities was six

times higher than World Health Organization standards.

More people die of asthma in India than anywhere else in the

world.

A BMC (Brihanmumbai Municipal Corporation) report in

2012 said that air, noise and water pollution is at an all time

high in Mumbai.


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4

Moreover, cities should be able to provide basic services and

amenities to migrant workers and economically vulnerable

sections of society. India is visibly deficient in providing even basic

services to its existing urban population. Basic requirements such

as drinking water and sanitation fail to meet best practice

standards by a huge margin.

Urbanization in India today, is mired in issues of gigantic

proportions. If we fail to attend to these issues, our urbanization

will lead to urban decay rather than urban development.

Our cities have grown in an unplanned and haphazard manner

due to rapid urbanization and lack of planning. Cities are

overcrowded because of natural population growth and migration

of people from the countryside to industrialized cities in search

for employment opportunities. This has put pressure on the

natural resources of cities; hence, more consistent efforts have to

be made to replenish resources so that people can meet basic

standards of living. In absence of habitation, the poor are driven

by necessity to live on footpaths or in slums having unhygienic

sanitary conditions. The pressure of increasing population has led

to construction of sky-scrapers to accommodate maximum

number of people within minimum space. But this has created

other issues such as fire hazard, lack of civic amenities such as

parks, open spaces and playgrounds.

India must rise and respond to the challenge of urbanization; it

will shape the future of the nation and its people. Moreover,

Indias urbanization is a subject of global interest and can

potentially attract billions of dollars as investments. Typically,

urbanization boosts industries such as transportation,

communications, food, healthcare and education and presents

lucrative opportunities for investment. Rapid development will

provide higher returns to investors than investments made in

developed countries. But in order to attract investments, higher

efficiencies must be built into the process of urbanization; our

cities must be run better.While India has underinvested in itscities, its toughest competitor - China paid heed to the demands

of urbanization and tackled it via appropriate funding, governance

and planning.

Its not that India has never taken a step in the right direction.

Almost a decade back, the Government launched the Jawaharlal

Nehru National Urban Renewal Mission (JNNURM). According

to March 2012 data from the Ministry of Urban Development

(MoUD), the JNNURM has approved projects worth $11.2

billion. But has it really helped transform Indias urban landscape?

Policies and plans must be supported by sound execution.

Urbanization needs vision and necessary capabilities to be built

over a period of time. Current projects that can potentially alter

the urban landscape in India are facing execution delays because

of bureaucratic and regulatory bottlenecks.The mandate now isto transform and increase the use of land, expand infrastructure

at the same time and speed up execution. This has to be a

constant effort. Daunting as it may seem, in each unique

challenge, also lies an opportunity.

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URBANIZATION AND ITS

IMPACT ON HOUSING

One of the biggest pitfalls of Indias unplanned urbanization is the

under-supply of housing units.According to the Ministry ofHousing and Urban Poverty Alleviation (MHUPA) in 2012 there

were 18.78 million units housing units short in urban India; nearly

95% of this shortfall was in the economically weaker sections

(EWS) and low income group (LIG) housing.

The urban housing shortage is closely linked to the creation of

slums in each major metropolitan city in India, which are

detrimental for the urbanization agenda.

According to Cushman & Wakefield Research, demand for urban

housing will scale up by nearly 12 million units by 2017 based on

just the current growth of population. Around 23% of this total1

demand will be generated in the top eight cities of India . By 2021,

the urban population is expected to increase to nearly 500

million, totaling to about 35% of the total population of India.

Hence, the total housing demand in the country by 2017 could be

as high as 88.78 million units.

Source:Cushman & Wakefield Research, National Housing Board (NHB),

Ministry of Housing and Urban Poverty Alleviation

Housing Shortage Units in Mn

Total Demand 88.78

Urban shortage in 2012 18.78

Rural shortage in 2012 43.67

Additional demand due to population

growth in 2012-2017 26.33

65

105

2011 2017

Slum Population in Urban India (In Mn)

Source:Census 2011

3.1

1.9

1.3 1.3 1.3 1.2 1.1

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

UttarPradesh

Mahar-ashtra

WestBengal

AndhraPradesh

TamilNadu

Bihar Rajasthan

InMillion

Housing Shortage : Top Seven Indian States

Source:Ministry of Housing and Urban Poverty Alleviation (MHUPA), 2012

Total Housing Shortage Projection

House Condition Urban Households

64% 69%

32% 29%

4% 3%

2001 2011

Good Livable Dilapidated

Source:Census 2011

CHALLENGES &

OPPORTUNITIES FOR

THE HOUSING SECTOR

IN URBAN INDIA

5

1. Top eight cities of India include Ahmedabad, Bengaluru,

Chennai, Hyderabad, Kolkata, NCR, Mumbai, and Pune

The 2011 Census enumerated that 13.9 million households with

a total population of nearly 65.5 million people reside in slums in

dilapidated.

The census definition of Good Housing is, Houses which do not

require any repair and are in fairly good condition.Although the

situation has marginally improved from year 2001, the overall

scenario is still depressing. Specific action plan towards migration


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How can Indias Urban Housing Crisis be Addressed?

Boosting affordable housing

Building integrated townships

Providing impetus to redevelopment

Increasing FSI limits and building vertical cities

In a country where millions of people are homeless, the importance and relevance of affordable housing can hardly be exaggerated. No one

can argue that there is a huge unmet demand, which, if tapped, will result in high velocity of sales. Majority of reputed developers in India do

not build affordable housing projects. They are mainly focused on mid to high-end and luxury projects. As mentioned, Indias urban housing

shortage is led by EWS and LIG sections but the upcoming supply in urban centres is beyond the reach of the people who belong to such

sections.

Integrated townships are built in places where a large tract of land is readily available. These townships essentially contain retail, housing as well

as commercial developments. Such townships also have hospitals and schools; so every amenity is in close proximity. Several states in India are

promoting the concept to ease pressure on big cities.

Slums are unfortunately a part of Indian cityscape. Majority of the people who belong to the EWS and LIG groups work in unorganized

sectors and live in slums for lack of better options. The problem can be resolved by demolishing slums, temporarily housing dwellers in

another locality and creating better quality housing to replace the slums. Similarly existing old buildings can give way to vertical cluster

development. Slums and old buildings are a part of central business districts and city centric locations at the moment. Unfortunately

redevelopment is a much politicized subject in India; tenants often do not agree to move to temporary houses in far flung locations. However,urbanization mandates effective land-use and redevelopment is an intrinsic part of that process. It needs to be streamlined in a manner that

benefits all stakeholders.

There is a strong pitch to increase permissible Floor Space Index (FSI) in Indian cities considering the space crunch in the city. Higher FSI

brings in more supply into the market, creating more homes. But vertical growth must be planned.Without the required infrastructuralupgradation, higher FSI will result in extra load on the already congested and chaotic roads. It must be noted that India lags behind in FSI

norms compared to top cities of the world. Cities such as New York, Tokyo, Hong Kong and Shanghai offer FSI limits between 10 and 15.

Comparatively in Mumbai, the permissible FSI ranges between 2.5 and 4 for redevelopment projects and between 1.33 and 4 for non-

redevelopment projects. Interesting anecdote - Mumbai is perhaps the only city where FSI limit has been downscaled; FSI limit was set as 4.5 in

Mumbai when it was introduced in 1960s.

ESSENTIAL PILLARS THAT CAN REDUCE THE URBAN HOUSING CRUNCH

of all housing stock to, Good Housing definitely needs to be

chalked out.

CURRENT REGULATORY APPROVAL PROCESSES

The table below provides a select list of the various legal and

Why Affordable Housing has not Worked in India

Land cost in urban city centres are high, often constituting more than 50% of the project cost for developers; this makes affordable

housing projects unviable.

Building affordable housing entails buying raw material at a cheaper cost so that the benefit can be passed on to the end-user or home

buyer. Land is the most important raw material for real estate developers. In order to build affordable homes, land can mainly be

purchased in peripheral areas of the city since cost in city centres are high. But peripheral areas of the city lack infrastructure facilities

such as good connectivity to city centres, water supply and sanitation.

Typically, in India, the process of acquiring necessary construction approvals for each project takes anywhere between 18-24 months. Such

a long holding period leads to additional cost escalation for developers.

People who belong to LIG and EWS segment have little access to organized finance.These people often do not have documents such as

proof of address, salary slips, etc.The housing finance industry is hence not geared towards providing finance to those who need it themost.

There is lack of sound government policies that enable and incentivize the affordable housing segment such that developers are geared to

build affordable housing projects.

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APPROVALS MUMBAI CHENNAI GURGAON

AUTHORITY TIME REQUIRED AUTHORITY TIME REQUIRED AUTHORITY TIME REQUIREDFOR APPROVAL FOR APPROVAL FOR APPROVAL

Ownership Revenue 15 days Chennai Metropolitan 12 months Revenue 3 days

Certificate/ Extract Development Authority Department

(CMDA)/ Taluka Office

Building Layout Development 1 month CMDA 3 months Directorate of Town 6 months

Approval Authority/ and Country Planning

Municipality (DTCP)

Non-Agricultural Revenue Minimum CMDA 2-4 months DTCP 6 months

Permission Department of 3 months

Tree Cutting Tree Authority 30-60 days Forest Department 2 weeks Forest Department 2-3 month

Approval Committee ofMunicipal

Corporation

NOC from the Municipal 15-30 days NA NA NA NA

Storm Water and Authority

Drain Department

NOC from the Municipal 15-30 days NA NA NA NA

Sewerage Department Authority

NOC from the Municipal 15-30 days NA NA Haryana Electricity 6 months

Electric Department Authority Board

NOC from the Municipal 30 days Traffic Department 30 days NA NA

Traffic and Coordi- Authority

nation Department

NOC from the In Mumbai, 30 days Fire & Rescue 2 - 3 Months Fire Department 3 months

Chief Fire Officer buildings above Services Department

24 meters in (DFRS)

height require

Chief Fire

Officer clearance

Environment MOEF/State 3 months to MoEF & Tamil Nadu 4-8 months MOEF 1-2 years

Clearance Environment Impact 1 year Pollution Control

Assessment Authority Board (TNPCB)

(SEIAA)/ State level

expert AppraisalCommittee

Ancient Monument Archaeological 6 months NA NA Archaeological (ASI) 2 months

Approval Survey of India Survey of India

7

regulatory permissions and approvals required from various

government bodies by anybody willing to develop a real estate

project. It also shows the time-frame mandated/suggested for all

permissions and approvals. However, most developers or

individuals undertaking any real estate construction have had to

submit various documents for approvals and comply to different

regulatory processes; often these mandated permissions take

longer than expected.

The above shows, the complexity of meeting all regulatory

approvals and gives us an idea of the exhausting time period and

Regulatory Approvals for Real Estate Projects

CHALLENGES &

OPPORTUNITIES FOR

THE HOUSING SECTOR

IN URBAN INDIA


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NOC from Airport Civil Aviation 3-4 months Airport Authority 1-2 months Airports Authority 3 months

Authority of India Department of India (AAI) of India (AAI)

Commencement Municipal 15-30 days NA NA NA NA

certificate Authority

Bore Well Registration Central Ground 60 days Central Ground NA Central Ground According to

Certificate(Outside Water Authority Water Authority Water Authority the nature

Municipal Limit) of project

NOC if near Coastal Coastal Zone 6 months NA NA NA NA

Area Management 1 year (+)

Authority

Permission for Collector & Executive 15 30 days Revenue Department 1 Month NA NA

Excavation / Royalty Engineer in the Ward

Payment Office (under the

Mines & Minerals

Act, 1957)

Road Access NHAI/PWD 60 days NHAI/PWD 3 Months NHAI/PWD 12 months

Highway /

Expressway

Lift Escalator Public Works Dept. 30-45 days Central Electr ical 2 Months Chief Inspector Lifts 30 Days

Installation Approval Authority(CEA) & Escalator

(PWD / CPWD)

Electric Substation Electricity 15 days Central Electrical 2 Months Electricity 2 months

NOC for all Distribution Authority(CEA) Distribution

Substation Authority Authority

Transformers in

Building (Electric

Service Provider)

Building Completion Municipal Aauthority 30 days CMDA 3-6 months DTCP 6 months

Certificate

Occupancy Municipal Authority 60 days Municipal Authority DTCP 6 months

Certificate

Permanent Power Municipal Authority 30 days Tamil Nadu Electricity 60 - 90 days NA NA

Connection Board (TNEB)

Permanent Water Municipal Authority 45 days Chennai Metro Water 60 days NA NA

Connection Supply and Sewage

(with inspection) Board (CMWSSB)

Permanent Sewerage Municipal Authority 30 days NA NA NA NA

Connection

Non Encumbrance NA NA Registration Department 7days Registration Department 3 days


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NOC from Water NA NA CMWSSB 30 days NA NA

Supply & Sewerage

Board

NOC from Indian NA NA Indian Air Force (IAF) NA NA

Air Force (IAF)

NOC from the NA NA Central Ground Water 6 months NA NA

Central Ground Authority of India

Water Authority (CGWAI)

of India (CGWAI)

Structural Stability Municipal Authority NA if required by CMDA, 30 days NA NA

Certificate has to be furnished by

the building company

on request

Bui lding Permit Municipal authority 30-45 days Local Body (Corporation 30 - 120 days Haryana Urban 30 days

of Chennai) Development

Authority

Explosive Substances NA NA Ministry of Commerce 3 months NA NA

Gas Petroleum & Industry, Petroleum and

Approval Explosives Safety

Organization (PESO)

DG Sets Installation NA NA CEA 2 months Pollution Control 1 month

Approval Board

Lift Escalator NA NA CEA 2 months NA NA

Operation License

Submission of NA NA NA NA DTCP 6-9 months

Licence Application

Demarcation / NA NA NA NA DTCP 6 months

Zoning Plan

Approval by DTCP

Site Office Approval NA NA NA NA DTCP/Development 3 months

Authority

Damp Proof NA NA NA NA DTCP 2 weeks

Certificate

Swimming Pool NA NA NA NA District Magistrate 3-6 Months

Operation License after approval fromabout 4-5 Departments

like Police, HUDA, Fire,

District Deputy

Commissioner,

Municipality


CHALLENGES &

OPPORTUNITIES FOR

THE HOUSING SECTOR

IN URBAN INDIA


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efforts required to be put in by developers and even individuals

seeking to construct a real estate project. This is further

compounded by the financial costs involved in getting the

requisite documents and approvals. Informal surveys conducted

by Cushman & Wakefield with developers have shown that it can

take up to two years from the planning stage to actual launch of

the projects by developers as they navigate the regulatory

processes. During this time, market dynamics can and do change

and expose the developers to unnecessary risks that affect the

viability of the projects. It is to guard against such risks that there

is a pressing need to ensure that regulatory processes are simple,

efficient and easy to implement.

One of the key issues for providing housing in urban areas

revolves around the availability and costs associated with

developable land. Depending on the city and location, land costs

can have a major chunk in the cost of housing and hence, issues

related to the availability of land have been difficult to resolve as

there are multiple facets linked with it. The Government has alsoplayed a big role in facilitating the acquisition of land for various

purposes including for various urbanisation projects that also

included land for housing. In a recent move, the Central

Government replaced the archaic Land Acquisition Act of 1894

with the Right to Fair Compensation and Transparency in Land

Acquisition, Rehabilitation and Resettlement Act 2013 to tackle

various long standing problems associated with the previous law.

This is the first Act that has attempted to address both

Acquisition and Rehabilitation & Resettlement (R&R).

The Act defines public purpose more definitively than before,

thereby reducing scope for misinterpretation. The Act also

forbids any change to the land-use after it has been acquired.

Further, objections to the purpose will be considered at an

appropriate government level.

Developers will need the consent of 80 percent of persons

whose land is acquired for private projects and 70 percent of

land owners in case of PPP projects. Moreover it provides for

compensation four times higher than the practice now in

rural areas and two times higher for urban areas.

The Act prescribes little on the governments involvement in

acquisition for private purposes; there is flexibility for the

The Right to Fair Compensation and Transparency in Land

Acquisition, Rehabilitation and Resettlement Act 2013

Salient Features

states to formulate their policy in this regard including the

area of land and percentage consent.

The Act is retrospective in nature; applicable to cases where

land was acquired earlier and no compensation had been

paid.

The procedure for acquisition and R&R will include a Social

Impact Assessment(SIA) which will cover the investigation of

public purpose, minimum extent of land required thereof,

estimation of displacement and social impact on affected

families apart from the overall cost versus benefit analysis for

the proposed project.

Timelines have been defined; 6 months for SIA, R&R package,

public hearings & enquiry into any objection; R&R should be

awarded within 12 months of public declaration; the Act also

incorporates penalties; 9 percent of the unpaid sums for

delays of one year and 15 percent of unpaid sums for delays

over one year.

To safeguard food security, the Act restricts acquisition of

irrigated multi-cropped land but for exceptional

circumstances. An equivalent area of culturable wasteland orland value has to be deposited with the government in case

of such an acquisition.

The archaic Land Acquisition Act of 1894 had to be replaced and

in our view the new Land Acquisition and R&R Act is a step in

the right direction. It addresses both acquisition and settlement

and also assesses the socio-economic impact on land owners and

farmers.

The implementation of this Act will provide an impetus owing to

the clarity of process and associated costs.

However cost of development will escalate as companies would

also need to budget for the compensations. Co-developing

projects is probably an option developers could consider. It must

also be noted that typically, developers acquire less than 50 acres

in urban areas and less than 100 acres in the rural areas. Hence,

the provisions would not apply to them. The Act caters to the

requirements of land for infrastructure projects and large

commercial projects such as SEZs.

The Act proposes to fix the compensation to be paid to the

Impact of the Act

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landlords. However, the method for calculation of fair market

value of the land is flawed as its provisions will work favorably

only in areas where there is an active land trading market. This is

because the market value of the land is to be derived from

records of land transactions in the last 3 years.

Some of the main issues that the Act has failed to address from

the landlords perspective are related to the irregularities in land

records and multiple land titles. In the absence of proper

ownership records, identifying the true owners and beneficiaries

of the compensation and R&R becomes a prolonged and difficult

task.

CHALLENGES &

OPPORTUNITIES FOR

THE HOUSING SECTOR

IN URBAN INDIA


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DOMESTIC CASE STUDIES

In order to approach urbanization in a planned manner, building

satellite townships is a must; such townships are the necessary

outcome of rapid urban development. Similarly integrated

developments promote higher quality of life, work-life balance

Manik

Baug

Sanghvi

Dapodi

Khadki

Army Area

Mula River

Khadki

Bazaar

SindhiColony

Sus Gaun

Ganesh Kindh

Adarsh

Nagar

Viman

Nagar

Phulenagar

Parvati

Kalyani

Nagar

Wadgaon

Sheri

Cavalry

Line

Magarpatta

City

GhorpuriKoregaon

Park

WanowriSasane

Nagar

Hadapsar

WanwadiMaharshi

Nagar

Navi Peth

Sangamvadi

Wadervadi

Parvati

Darshan

Kothrud

Bavdhan Goklalenagar

DattavadiHingne

BudrukhVittalvadi

Pune

Cantonment

PUNE

Rakshak

Society

Kavadewadi

Case Study 1 - Magarpatta City, Pune

MAGARPATTA CITY, PUNE

POSITIVE FEATURE : Innovative ownership model where

120 farmers came together to monetize their land asset

and created one of Indias most successful townships.

NEGATIVE FEATURE : Infrastructure around the

township remains a challenge.

Timeline of Development: Magarpatta City, Pune

Land underPune

Municipality

Since

19601982 1995 2000 2006

Land markedas Future

urbanisable

zone

MagarpattaCity wasapproved

Constructions

starts

Approvalreceived for

SEZdevelopment

12

and cleaner and greener environment. In India, the number of

integrated townships, business hubs and townships are on the

rise. In this section, we analyze three major initiatives that were

designed to sustain urbanization.

Fact Sheet

Magarpatta City is located 9 kms away from Pune's city center and covers a land area of 430 acres.

It is a unique case study in the real estate history of India because of its ownership dynamics; the entire development is owned by 120 farmers

and 800 beneficiaries.

In 1993-94, the owners (farmers) decided to form their own development company called the Magarpatta Township Development and

Construction Company in order to develop the land.

The farmers became shareholders of the company to the extent of the land they individually held; all shareholders would get a percentage of the

sale proceeds (revenue share).

It took the development company seven years to build the township; it promotes the walk to work theory in unprecedented measures. The

township also has faci lities such as a mall, commercial office hub, an educational institution, a hospital, power substations, library and petrol pump

within the campus.

The city was built on the foundation that seven amenities will be provided to its inmates; a clean and sustainable environment, good living

standards, a modern educational system, state of the art working conditions, and reliable security.

The township is environment friendly with large gardens, 25 lakh square feet of green cover, rain water harvesting and solar power.

Magarpatta Citys corporate occupiers include Accenture, Patni, Amdocs and WNS Global services; The Seasons mall has also opened with anchor

tenants like Shoppers Stop, Westside, Croma and Cinepolis.

The city provides employment to over 60,000 people directly and about 20,000 people indirectly.

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The township's Walk to work philosophy has helped occupiers

tackle the problem of attrition to a large extent. Despite the fact that

Magarpatta City charges its occupiers a marginally higher rental than

other commercial hubs in the vicinity, according to Cushman &

Wakefield Research, its vacancy is as low as 7.4%. Magarpatta City is a

Grade A development and such a low vacancy is testimony to the

quality of services and infrastructure facilities that the development

allows its occupiers.

Magarpatta City provides housing to over 35,000 people, absorbing

70% of its employees' housing needs; thus decongesting Pune and

ensuring planned urbanization.

Development in Magarpatta City also led to development in the

surrounding areas such as Hadapsar, Mundhwa, Manjri and

neighbouring Kharadi.

No degradation of the environment was one of the guiding principles

with which Magarpatta Township was built. It is an example of how

meticulous planning can go a long way in ensuring a clean environment.

The management adopted measures such as creating large gardens,

disposing waste in a scienti fic manner, using solar energy emission

control measures and value engineering products.

It took 7 years for the vision of Magarpatta city to materialize. In India,

approval process is one of the core issues that ail the real estate industry.

In the case of Magarpatta City, it was a double whammy as it was a

project that was first of its kind. Authorities had to be convinced that it

was a viable idea. There is a critical need to develop satellite townships;

Magarpatta city has opened channels of thought among land owners

who want to monetize assets; Government must be innovative and

encourage such developments.

More than 20,000 people who work in Magarpatta city do not live there.

Workers have to battle a high level of traffic congestion.

Financiers must also support such projects. Magarpatta Township

Development and Construction Company had no financial institution

until HDFC Bank decided to pitch in.

Project Management today is a specialized expertise and it could be

possible that the Magarpatta Township Development Company,

despite its path breaking initiative, is not equipped to handle all

aspects of the real estate business.

POSITIVES LEARNINGS

Case Study: Magarpatta City, Pune

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IN URBAN INDIA


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Fact Sheet

Mahindra World City is spread across 1,500 acres.

It is located about 50 km away from the main city of Chennai.

It was planned and promoted in association with the Tamil Nadu Industrial Development Corporation (TIDCO) via a Public Private Partnership

(PPP) model.

It became operational in 2006.

It connects directly with the National Highway (NH) 45 or the Grand Southern Trunk Road (GST) which is part of the Golden Quadrilateral

project, connecting the 4 metro cities Delhi, Mumbai, Kolkata and Chennai.

Along with the 4 metro cities, it also connects major Tier II cities such as Pune, Ahmedabad, Bengaluru and Vishakhapatnam.

It contains three sector specific economic zones dedicated to IT, auto ancillaries and apparel & fashion accessories along with a Domestic Tariff

Area (DTA).

The residential conclave within the township is about 77 acres in size and consists of two housing developments: Aqualily & Sylvan County.

61 companies currently operate in Mahindra World City.

Within its premises, it also has educational infrastructure, medical facilit ies, recreation centres, shopping mall and a multiplex.

It is surrounded by green cover which consists of hills, natural lakes and forest reserve, highlighting the importance given to preservation of

natural environment at the planning stage.

MAHINDRA WORLD

CITY

POSITIVE FEATURES :

Successful development mix;

world class infrastructure

provided; capable of attracting

global big wigs & providing

them with cutting edge

facilities.

NEGATIVE FEATURES :

People working in Mahindra

World City have to commute

long hours in overcrowded

public transport; no support

infrastructure is provided.

APRIL 2014


Tiruttani

Walajapet

Arani

Kalavai

Nagari

Pulicat Lake

Puttur

Ponneri

Walajabad

Kakinada

Kanchipuram

Tiruvallure

NH4

NH45

NH205

NH205

NH5

CHENNAI

Sriperumbudur

Mahindra

World

City

MambakkamOragadam

Industrial

Corridor

Case Study II : Mahindra World City, Chennai


17/2815

It has successfully created a development mix ideal for global brands.

Braun, BMW India, Capgemini, Infosys, Wipro, etc. have set up shop, in

world class facilities. In the absence of such a development, these

companies would either not have an option to establish in Chennai or

choke in already crowded business districts.

The green infrastructure at Mahindra World City highlights the

importance given to preservation of the natural environment during

the land-use planning and design process and it would not be wrong to

state that this project, in totality, has managed to deliver a self

sufficient model with a high-end infrastructure enabling companies'

and investors' ease of operations.

The construction of Mahindra World City attracted several other

companies to set up operations in the vicinity. Hence it acted as an

impetus and put GST Road on the economic map of Chennai;

propelled demand for housing in pockets such as Gudavancheri,

Maraimalai Nagar, Singaperumal Koil and Potheri, which have now

emerged as prominent micro markets on the GST industrial corridor.

According to Cushman & Wakefield Research, as many as 1,100

residential units were launched in these pockets in 2013 and catered

to both the affordable and mid-income groups. The mushroomingresidential developments on the GST Corridor is indicative of how

urban planning can help decongest city centres and lead to balanced

regional development.

Mahindra World City consists of a Lifestyle Zone aimed at providing

housing and other social infrastructure to improve the quality of life of

its residents. The residential conclave in the Lifestyle Zone is about 77

acres in size and consists of two housing developments; this is a step

forward in the direction of planning initiatives which is a pre-requisite

while developing new urban areas to accommodate the growing

population and decongest city centres.

Whilst Mahindra World City provides the requisite infrastructure to

its occupiers, it fails to do the same for the workforce those

occupiers employ. For one, majority of the workforce do not have an

option to buy/rent houses within the premises. Moreover, they have

to spend many valuable man-hours commuting to and fro every single

day.

The infrastructure in and around the township is poor. Presently, this

site is connected by both road and rail links. However the number ofbuses running between Tambaram (a major hub, also known as the

gateway to Chennai) and Mahindra World City are always

overcrowded. It is estimated that workers take at least 1.45 to 2

hours to reach the nearest bus stop.

In 2009, Mahindra World City Developers (MWCD) redesigned the

nearest railway station to World City (approximately 5 km away). This

station is maintained by a PPP between MWCD and the Indian

Railways. It serves more 20,000 commuters daily; 40% of who are

Mahindra World City's workforce. Redesigning the station was

positive. However number of trains need to increase; introduction of

faster monorails is recommended. Improved transportation network

will only go a long way in attracting more people to take up

employment opportunities in Mahindra World City and will alsoattract more investors and global companies.

Residential developments have been planned keeping in mind the

crme-de-la-crme of the society or the High Net Worth Individuals

(HNIs) at the top of the economic pyramid who can afford the sky

rocketing prices for these housing options inside the premises. These

developments are aimed to cater to professionals like C-Level

executives. Thus, the housing options cater to very small strata of the

society and the general populace are left with no housing option

within the premises.

POSITIVES LEARNINGS

Case Study: Mahindra World City, Chennai

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KOLKATA

South Dumdum

Rajarhat Gopalpur

New Town

Science City

Salt Lake City

Phool Bagan

Park Street AreaTangra

Taltala

Dharmatala

Paikpara

Bagbazar

Sovabazar

Maniktala

Manchuabazar

Keshtopur

Hatiara

Pitha Pukuria

Anantapur

Sikharpur

Patharghata

Dhapa

Sinthi KaikhaliReekjoyoni

SRCM Rd

Bishnupur

MohishathanNabapally

Kulia

Rajarhat

Case study III : Rajarhat, Kolkata

16

Fact Sheet

Rajarhat is located 30 kms from the main city of Kolkata and about 8-10 kms from the airport. It was planned by Kolkata Metropolitan

Development Authority in 1994 as a satellite township of Kolkata.

Rajarhat has some of the best real estate developments of Kolkata; it offers quality grade A office space with large floor plates and scalabilityoptions at competitive cost. It has one IT park and two IT SEZs which are operational.

Major MNCs and IT companies have set up their operations in Rajarhat. Some of these companies include IBM, TCS, Accenture and Genpact. TCS

is also building a 50 acre IT SEZ and it is slated to be operational in 2015.

Rajarhat houses about 7.8 msf of office stock, which is around one-third of the total office stock in Kolkata. About 72% of the stock in Rajarhat iscurrently occupied.

Rajarhat is not just an attractive destination for companies who want to set shop in the city but also for residential real estate developers. The

township has a host of major local and national level real estate companies launching projects.

Rajarhat also has malls, educational institutions and hospital facilities for the needs and recreation of residents.

Rajarhat has brought Kolkata back on the economic map of India. It

has helped the city position itself as an IT hub. Because of its proximity

to the airport, it has emerged as a business destination. Traditionally

business activities in Kolkata were defined by family-owned businesses.

But today a development such as Rajarhat has opened up the

professional arena.

Rajarhat provides an alternative, smoother connectivity to the airport.

Traffic is largely decongested; quality of road is better than available

alternatives and it provides a direct connect to the international

airport rather than a long winding, congested road.

Rajarhat provides housing; local and national players have flocked to

Rajarhat and there has been interest from buyers.

Rajarhat is not well connected by public transport system. Most

people drive to work. Bus routes have been channelled; metro rail

links have also been planned. The two metro links; Garia-Airport and

East-West metro corridor, which once they become operational,

would further improve the connectivity to Rajarhat. But both the

projects are delayed and mired in land acquisition and cost escalation

issues.

While housing stock may be available, Rajarhat is largely unoccupied

because of lack of support infrastructure. There are issues of

amenities such as water and power supply. As a result, high launches

are often met with lukewarm response.

In the absence of inhabitants, Rajarhat's million square feet mall space

is under pressure. Vacancy levels of about 20% are on the higher side

mainly due to lack of catchment in the area.

POSITIVES LEARNINGS

Case Study: Rajarhat, Kolkata

RAJARHAT

POSITIVE FEATURES : It made

Kolkata an IT hub; networked the

airport and created housing

alternatives to the main city.

NEGATIVE FEATURES : Lack ofinfrastructure and slow

implementation has worn off the

initial exuberance and derailed

potential.

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The skyway in Singapore is a spectacular example of

innovation. It achieves the optimal mix of high class

planning and design on one hand and public usability

on the other hand. The 18 giant trees collect

rainwater, generate solar power and allow hot air to

be released from the conservatories below, in a kind

of urban ecosystem.

Global Case Study I, Singapore

INTERNATIONAL CASE STUDIES

China and Singapore have mapped their urbanization journey

almost alongside India and in certain ways, have outdone India

too. The differentiating factor is that these countries have been

successful in pre-emptive measures (building for upcoming

demand); India on the other hand needs to manage the crisis that

LEARNINGS FROM SINGAPORE

Singapores biggest achievements in urban development

include public housing and transport infrastructure

supported by holistic planning approach from various

government agencies.

Planned as a compact city with high-density residential

and commercial developments integrated around various

transportation networks.

17

urbanization has brought with it; it has much to learn so far as its

ability to plan and implement is concerned from economic

powerhouses such as Singapore and Pudong.

Fact Sheet

Located on the southern tip of Malay Peninsula, it has one of worlds five busiest airport

Global commercial hub supported by diversified economy through trade, mainly manufacturing

As of 2011, total population of 5.18 million, out of whom 63% are citizens while the rest are Permanent Residents or Foreign Workers

At 2.1% per annum, the resident population growth rate is low but highest population density in Asia

Developed one of the worlds best planned and integrated public transport infrastructure; only 16% Singaporeans own cars

As per UN-Habitats Quality of Life and Urban Prosperity Policy Survey 2011, Singapore features as the only country which is committed to

promoting quality of life of its citizens.

As per Urban Redevelopment Authority (URA), Singapore has a total of about 1.2 million housing units, out of which 0.9 million are Housing

Development Board (HDB) flats, with plans to develop 110,000 more public housing units by 2016.

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In 1990, Singapore's Public Works Department instituted a quota limit

for vehicles called the Certificate of Entitlement (COE) to curb the

growing vehicle ownership because a small city-state like Singapore

had limited resources and traffic conditions had started to worsen. As

a result, Singapore does not have traffic congestion and its government

encourages people to use high quality public transport.

Singapore's Housing and Development Board (HDB) activelyconstructs low-cost public housing towns. Initially started in 1960

during a housing crisis, HDB has built more than 21,000 flats in less

than three years and rehabilitated people living in slums and squatter

settlements. By 1965, it had built 54,000 flats and more than 82% of

Singaporeans live in HDB flats currently.

Singapore has been focused on sustainable long term urban planning

by Urban Redevelopment Authority (URA) to battle land shortage and

poor infrastructure since as early as 1960s.

Singapore has a green cover on 50% of its surface area and over 450

public parks and gardens. It has four nature reserves to preserve its

biodiversity which cover more than 3,000 hectares.

Strong emphasis on creating resource-efficient policies and

investments in achieving environmental sustainability to improve

quality of life. Water shortage is a phenomenon which is practically

unknown in Singapore.

In India, total vehicle population is 40 million units, growing at an

annual rate of over 5%. 2.6 million passenger-vehicles were added in

2012-13 alone. Vehicle emissions are the top reason for pollution in

India, according to the Yale study presentation in Davos. Urban

dwellers battle congested and choked roads. People prefer personal

vehicles because Indian public transport system is not as

sophisticated as Singapore.

Comparatively, every major study done on urbanization in India haspointed out the dearth of government actions and schemes to

provide housing for LIGs; in fact affordable housing is the most

recurrent recommendation in all studies and reports, including ones

conducted by the Planning Commission of India. As per MHUPA, India

has a shortage of 18.78 million housing units in urban areas.

In India, slum rehabilitation and redevelopment lacks political

gumption; it also lacks private sector participation to the extent that

will make a discernible difference. Major rehabilitation schemes as

MIAL (Mumbai Airport Authority Limited) and Dharavi

redevelopment plan have gotten stuck, mired in controversies and

unprecedented delays.

India's current forest and tree cover is estimated to be 78.29 million

ha, constituting just 23.81% of the geographical area of the country

(ISFR, 2011). As per the estimates of the Forest Survey of India, forest

cover has increased marginally from 64.08 million ha in 1987 to 96.2

million ha in 2011.

As per the Ministry of Water Resources, urbanization and

industrialization have led to a severe water crisis in India; as per

census data, the per capita availability of water has reduced from

1,816 cubic meters in 2001 to 1,545 in 2011. Moreover, water quality

data of 150 river stretches has revealed that Bio-chemical Oxygen

Demand (BOD) has exceeded the desired levels in 120 rivers.

CRITICAL LEARNINGS TAKEAWAYS FOR INDIA

Case Study: Singapore

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Pundong

New Area

Yellow Sea

Huangpu

Shanghai

Pudong in 1990 (across the river)

Pudong in 2010 (across the river)

PUDONG

POSITIVE FEATURES : Effective policies, successful

infrastructural development, short time taken for

development.

NEGATIVE FEATURES : Lack of inclusion of Chinese

tradition, rising inequality, high carbon emission, rapidland subsidence.

19

Global Case Study II, Pudong : Urbanization from Scratch

Location: East of Huangpu River, Shanghai, China

Fact Sheet

2 thArea - 1,210 km (about 1/5 of Shanghai Municipality

Area) (2010)

thPopulation - 5 .04 million (2011) (about 1/5 of Shanghai

Municipality Area)

Density - 11,000 /sq. mi. (2010)

GDP - USD 57 bn (2010)

Development of Pudong

In 1993, Chinese Government set up a Special Economic Zone at Chuansha, in erstwhile farmland and countryside, creating the Pudong New

Area. Conceived as excellent model of planning, it has influenced the development of other Chinese cities

Pudong was underdeveloped area with only 8% of urban area and concentration of most polluting industries. So to create an urban centre,

relocation of industries and associated housing had to be done to make way for new construction.

Landmarks: Lujiazui Finance and Trade Zone, the Shanghai Stock Exchange, Oriental Pearl Tower, Jin Mao Building, Shanghai World Financial Centre

and Shanghai Tower, Disney Park (under construction)

Infrastructural plan for Pudong included, a core of 3 ports: Shanghai Pudong airport, Waigaoqiao deep water port and information port, 3

networks: rail network, urban highway network and cross-river transport network and 3 systems: power supply, natural gas and district heating.

Water plant, new water resources, district drainage system and sewage system were established. Pudong was designed as a telecommunication

hub and was connected to a new national fibre optic network. Shanghai Metro servicing airport and other areas were built. 5 major tunnels and 4major bridges connect Pudong to west Shanghai (Puxi), 2 more tunnels are under construction.

Pudong has emerged as Chinas financial and commercial hub; it also boasts manufacturing and export economy. Jinqiao Export Processing Zone,

Zhangjiang Hi-tech Park and Waigaoqiao Free Trade Zone were also created to boost the economy of Pudong and create employment avenues.

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2

Preferential policies not allowed in other SEZs were allowed here.

Apart from reduction/elimination of custom duties and income taxes,

foreign investors were granted right to open financial institutions and

run tertiary industries. To increase foreign investment property, tax

subsidies were given on houses bought by foreign investors.

Shanghai was permitted to set up a stock exchange and allowed

foreign banks to engage in business using local currency.

Land ownership is not allowed in China. Only renting is allowed and

the length of the lease varies depending on the zoning status. Land

leasing was used to attract FDI to restructure the city and generate

capital for infrastructure projects and funding new housing for existing

residents, especially in suburban locations. For example: Land-use

rights of 137 pieces of land were transferred by tender in the 2000s.

A series of laws and policies were established on local, district and

national levels.

Pudong preferred to attract private investment rather than PPPs by

giving a lot of flexibil ity. PPP were done in land development, urban

renewal projects and infrastructure development. The development

process was broken into a number of smaller tasks and assigned to

subsidiary or joint ventures set up by development companies. Largely

development companies sold land-use rights on raw/developed land as

per the land-use and permitted high FAR (upto 8 initially), learning

from development model of Hong Kong. Considering the high

expected gains, many of the land development companies themselves

provided for infrastructural development like provision of drainage,

power station and roads.

Pudong dealt with both expropriation and relocation and so created

job centres for providing a variety of training to re-skill the jobseekers.

The people were relocated from old public housing to new facilities

with proper drainage, water, power, better equipment and facilities.

Thus relocation received local support despite corrupt officials trying

to retain compensation. Pudong is promoting welfare housing called

'indemnificatory housing', rental housing for low income families and

management services of the same to provide healthy residential

quarters and ease housing demand and surging housing prices. Pudong

has harnessed the vast internal migration, attracted armies of workers

who built the infrastructure, provided a pool of labour for its factories

and filled its apartments. 2 million people moved to Pudong in 10

years and reportedly 60 lakhs square meters of indemnificatory

housing is present and new construction of approximately 39 lakhs

square metres of housing is being targeted.

SEZs have been set up in India; however, instead of focusing on

creating self sustainable SEZ units, India has licensed a large number

of SEZs; thus the focus was missing. So, SEZs could not gain

prominence as locations for state-of the art technology and

infrastructure. Faulty policies like offering incentives under the foreign

trade policy to exporters outside of SEZs and certain disincentives

arising out of free-trade agreements (FTA) have worked against Indian

SEZs. Schemes like duty drawback scheme, and focus market and

focus product schemes etc. were offered to those companiesoperating outside SEZs but not to those inside.

Land ownership is allowed in India but the titles are extremely

unclear. The land-use patterns in master plans were not changed in

tandem and mostly the implementation takes too much time. The

Right to Fair Compensation and Transparency in Land Acquisition,

Rehabilitation and Resettlement Act, 2013 has come recently to guide

India's industrialization drive. DIPP has very recently proposed that

Indian companies with FDI be allowed to buy agricultural land as

most of the land available for township projects is agricultural in

nature; currently FDI is allowed in construction development and

serviced housing plots only and requires approvals from a number of

authorities. The laws related to land are very primitive in India.

Restrictive FEMA guidelines stop the foreign money from flowing into

real estate.

PPPs in India involve a single entity/consortium for the entire process

which causes delays in resource deployment and is financially

burdensome. Involving local, public and private entities in

infrastructure development by breaking each task into small piece

provides simultaneous and faster growth model. In India, the approval

process may vary largely from city to city and takes on an average 12-

15 months for approval process from land-use conversion to

completion, provided all documents are in place without any

ambiguities. FAR regulations are low with a maximum of 4 in select

areas of cities in select asset classes like Bengaluru, Mumbai, and

NCR.

Urbanization has brought about large scale rural migration and led to

proliferation of slums in India; currently almost 65.5 million people

reside in them. The high population density is wreaking havoc on the

present infrastructure of the cities. 3.5 slum dwellings across Mumbai

are not being legalized because of the fear of exerting further

pressure on the city's infrastructure. Infrastructure in Mumbai has

not kept pace with the population. The worrisome outcomes of the

current and projected slum population growth are an acute water

shortage, poor hygiene and even an epidemic.

Currently India does not have any rental housing schemes, which are

commonly found in other countries to cater for the low income

segment.

CRITICAL LEARNINGS TAKEWAYS FOR INDIA

Case Study: Pudong

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Environmentally, massive population growth and rapid urbanization has led to spike in carbon emission from transportation, household and industrial

activities. Shanghai has the highest carbon dioxide emission density. Land-use change has contributed to creation of urban heat islands and climate

change.

Over extraction of groundwater has led to land subsidence and Shanghais urban and peri-urban areas, i.e. Pudong have reached the highest land

subsidence of 2630 mm. Land subsidence brings a number of problems like flooding, damage to drains, sewers, roads, canals and bridges and even to

buildings.

Key Problems

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RECOMMENDATIONS &

CONCLUSION

Urbanization in India has occurred more slowly than in other

developing countries. The pace of urbanization is now likely to

accelerate as the country follows a more rapid growth trajectory.th

According to the 12 Planning Commission report, it took about

40 years for Indias urban population to rise by 230 million people

but it will take half that time to add the next 250 million. SinceIndia has so far not paid attention and built cities in a systematic

fashion, its urbanization plan now has to find remedies to existing

problems whilst building capacities for projected growth in

different verticals.

As learnt from the global case studies, urbanization is always

backed by policy measures. It is not as if India has not taken any

steps towards urban planning; only that these measures have

been grossly inadequate.

The Jawaharlal Nehru National Urban Renewal Mission

(JNNURM) was launched in December 2005. JNNURM

renewed the focus on urban renewal, taking a number of

initiatives such as sanction of Bus Rapid Transit System

(BRTS).

Swarna Jayanti Sahari Rozgaar Yojana (SJSRY) was launched in

1997 to enable urban poor to get gainful employment. Since

inception, about 12.3 lakh persons have received training

under this scheme.

Rajiv Awas Yojana was launched in 2011 to make India slumfree.

Employment of Manual Scavengers and Construction of Dry

Latrines (prohibition) Act 1993. Under the Integrated Low

Cost Sanitation Scheme (ILCS) 2.5 lakh dry latrines have been

converted into sanitary ones and about 1.55 lakh new toilets

have been sanctioned.

Extension of Metro rail network in Delhi, Mumbai, Chennai,

Bengaluru & Kolkata has been a major achievement that has

led to a transformational change.

Some Key Policy Measures Undertaken

12TH PLANNING COMMISSIONS OBSERVATIONS

ABOUT JNNURM

Some of the key inadequacies noted during implementation of the

programme included failure to mainstream urban planning,

incomplete reforms and slow progress in project implementation.

Delay in securing land for projects and obtaining approval from

various regulatory authorities also led to delay in implementation of

some of the projects. Another major shortcoming was the limited

success in leveraging of JNNURM fund by allocating non-budgetary

financial resources including funds under PPP framework.

What the Urban Picture should Look Like?

How can India Tackle Rapid Urbanization?

House for all

Quality & affordable public transport

Cleaner Environment

High penetration of basic amenities such as water &sanitation

High quality of life for urban dwellers

Political will, action and implementation are the most important

factors so far as urbanization in India is concerned.

Developments must be assessed, resources must be deployed

and timeline must be set and adhered to.

Following enablers are required to tackle rapid urbanization:

PLANNING

Land is a scare resource. How well a country does in

urbanization depends on how innovatively land is used.

Revamping FSI guidelines and redevelopment are important

measures but more important is to first prepare

infrastructure such that additional floors do not increase

additional traffic load.

22

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housing. Incentivize projects that need to be developed on

priority with measures such as tax or commercial benefits.

By 2030, Indias cities will be bigger than several countries!

Urban governance needs an overhaul. Global cities have

empowered mayors or personnel who are clearly

accountable for the citys performance. Dedicated

metropolitan authorities in every city with well defined roles

are a must for the management of large Indian cities.

IMPLEMENTATION

Affordable housing is an abused term in the Indian real estate

industry. It is often a marketing gimmick! The government

must define and incentivize houses that are truly affordable

so that urban centres have housing for all. The demand and

potential can hardly be understated.

Encourage micro mortgage financing schemes so that people

who are actually needy can afford homes. As stated above,

people who belong to EWS or LIG category work in

unorganized sectors and do not have formal documents to

access credit.Execution of projects is one of Indias main weakness; it truly

fuels the culture of slower implementation. India must move

towards a single window clearance so that 18-24 months are

not spent on getting permissions.

23

Pre-investing and effective planning must be adopted. This can

be applied in a number of ways. For instance, in peripheral

city limits, houses are sold without good connectivity to the

city centres. Infrastructure facilities must be laid before it

becomes a residential or commercial hub, otherwise it

creates chaos and not convenience. Similarly, Tier II cities

must be ready to handle a boom or a spill-over of urban

population.

FUNDING

Urban development needs funding in unprecedented

measures. Monetizing land assets could raise funds; land sales

in upcoming hubs & promoting PPP (Public Private

Partnership) models will generate funds for urban

development.

India should bring in reforms such as the GST (Goods &

Services Tax), which is meant to incentivize growth. The

implementation of GST will unify taxes and make India a

stronger economy.

GOVERNANCE

Do away with archaic laws such as Rent Control Act and

bring in progressive measures such as the concept of rental

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About Cushman & Wakefield

Cushman & Wakefield is the world's largest privately-held

commercial real estate services firm, The company advises and

represents clients on all aspects of property occupancy and

investment, and has established a preeminent position in the

world's major markets, as evidenced by its frequent involvement

in many of the most significant property leases, sales and

management assignments. Founded in 1917, it has approximately

250 offices in 60 countries, employing more than 16,000professionals. It offers a complete range of services for all

property types, including leasing, sales and acquisitions, equity,

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banking, corporate services, property management, facilities

management, project management, consulting and appraisal. The

firm has nearly $4 billion in assets under management globally.

Cushman & Wakefield established operations in India in 1997 and

was the first international real estate service provider to be

granted permission by the Government of India to operate as a

wholly owned subsidiary. We are a strong team of over 1,500

employees, operating across New Delhi, Gurgaon, Mumbai, Pune,

Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. In

addition, we service over 40 other cities such as Nagpur, Cochin,

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A recognized leader in local and global real estate research, the

firm publishes its market information and studies online at

www.cushmanwakefield.com/knowledge

For more information about Cushman & Wakefield in India, contact:

Sanjay Dutt

EMD - South Asia

Cushman and Wakefield

[email protected]

For more information about Cushman & Wakefield, contact:

Sitara Achreja

Director - Marketing & Communication


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For more information about C&W Research, contact:

Siddhart Goel

National Head - Research


[email protected]

Authors of the report:

Disclaimer

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if thisshould prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors,

omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.

2014 Cushman & Wakefield.

All rights reserved.

Siddhart Goel

National Head - Research

[email protected]

Priyanka Ghosh

Research Analyst

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Virendra Joshi

Senior Manager - [email protected]

Sarbani Chatterjee

Manager - Research

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Divya Grover

Deputy Manager - Research

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Vineet Sharma

Associate - Research

[email protected]

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