New Delhi: Over the years, Indian real estate has been a seemingly limitless source of negative hype. Scams, controversies, rumblings about delayed projects, agitations by consumers and debates about the over/under-regulation of the real estate sector have all provided ready cannon fodder for countless publications, internet forums and assorted activists. In fact, the real estate sector has drawn more media flak and outrage than any other industry in India.
This tempts the question – why is Indian real estate a sector that everyone loves to hate? It is a valid question, and one that many corporate heads, industrialists and big-ticket investors have asked me during my business travels abroad. The question – or variants of it - is sometimes asked in an amused and otherwise unconcerned manner, but more often with real interest tinged with worry. After all, almost everyone with a healthy investor instinct has or intends to have a piece of the massive Indian growth story, and any kind of participation in it invariably involves real estate.
There is no easy answer to this question, which is in any case a rather unfair one to begin with. Nevertheless, the generalized negativity about the Indian real estate sector that has been created in the public mind is a reality.
I usually counter the question with another question – "What have you read or heard about it that makes you think so?" My intention is not to be evasive, but to understand whether the question comes from a real understanding of the Indian real estate industry and its complexities, or whether it just a knee-jerk reaction to yet another hyped-up media report. Very often, the questioner is genuinely informed and has been following media stories about the sector quite closely, but no longer knows what to believe.
This is understandable, and I invariably ask my questioners if they have enough time for a detailed answer. After all, this confusion is the result of a war of opinion that has been waged against the Indian real estate sector for quite a while. The controversy is made even more complex by the fact that it is being actively encouraged by people who have no interest in presenting a more realistic picture of the Indian real estate industry.
What lies beneath
Real estate is something that lives and breathes at the very core of every Indian's being, not least of all because it is considered the most important manifestation of success, wealth and power. Unfortunately, the fact that real estate transmits such signals in India has made it an object of not only admiration and desire, but also of something close to fear. While fear is invariably the result of a lack of understanding, it is nonetheless a very real force on the ground.
Naturally, any environment involving fear also needs villains. It is almost axiomatic that Indian real estate developers are the designated 'bad guys' – the greedy perpetrators of crimes against the helpless common man, wielding their wealth and political clout with impunity, with the sole intention of turning a profit and furthering their own agenda.
Such a stage-setting lends itself rather well to a protracted public drama involving the tantalizing element of good battling evil; of victims versus perpetrators. The epic battle of the Mahabharata, as it were, translated into present-day brick and mortar. Such a drama is readily absorbed by Indians almost by default, but is more damaging is the fact that it is also exotically interesting to foreign palates.
Market watchers in countries that India has or is seeking to have economic ties cannot but notice the bad press that Indian real estate is getting. This is how the unfair and wildly inaccurate blacks and whites of the Indian condition as depicted by 'Slumdog Millionaire', become superimposed on an industry which is - if fact be told - the backbone of the country's economy.
If we take a closer look at Indian real estate today, there is no escaping how important it is:
* The Indian real estate sector generates employment for about 7.6 million people across the country last year
* Real estate is the most single-important consideration for any foreign company eyeing Indian shores to launch operations and create countless more jobs
* Real estate's overall contribution to India's GDP was estimated at about 6% in 2013
* Real estate constantly cross-fertilizes other industries like cement, steel, paint, chemicals, tiles, fixtures and fittings
The scams that have so seriously impacted the image and credibility of Indian real estate in the past were not the result of a unified developer nexus, but the work of individual players whose crimes have now been attributed to the industry at large. Should we not also consider how some of India's biggest real estate developers took incredible risks to open up entire new cities to add to the country's growth?
The urbanization that is the focal point of India's economic growth hinges on the growth of its cities, and therefore on the products that real estate developers deliver. Wherever we see new cities rise from obscurity into prominence, there are developers restructuring skylines, building homes for population and office spaces for them to work in.
No Indian's heart can help but swell with pride as they perceive a city like Mumbai, Gurgaon or Bangalore from the air as their planes prepare to land there. What gorgeous evidence of progress is displayed in the tapestry of skyscrapers jostling each other for space, road networks spreading out to connect new areas to existing ones, and office and manufacturing complexes providing the economic nerve-centres.
This is the work of real estate developers, but their contributions towards weaving the very fabric of our cities is overshadowed by the specter of antipathy that has been generated against the entire real estate sector. We must try to understand the basis for this antipathy before we can explain it.
At the end of the day, real estate is a business like any other, and no industry can claim to be free of flaws and anomalies. Almost every day, we hear about delayed projects, deviations from project quality and configurations, and additional payments being charged for changes in apartment areas. We read about how real estate is the first port of call for politicians looking to off-load their unaccounted funds, about developers who have launched projects on land which has not been cleared for development, and how others have been pulled up for flouting FSI and environmental norms.
Such things do occur, and the developers who practice business in such a manner must be held responsible and brought to book.
0 comments:
Post a Comment