[ecis2016.org] The Indian real estate sector has made progress by leaps and bounds so far but it needs to adopt technology to advance further, especially in the affordable housing segment
There is a collective belief in the Indian real estate market that technology can help create affordable housing. So far, the debate has been focused on the policy framework and there has hardly been a cost and benefit analysis about technology creating affordable housing. Brotin Banerjee, MD and CEO of Tata Housing, asserts that the use of right technology, in fact, helps reduce cost and execution time. Indian real estate developers are adopting international methods like dry-wall techniques, pre-fabricated construction, slip-form construction and Mivan shuttering. He advocates policy incentives to make Indian realty more tech-savvy.
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Banerjee continues, “In order to reduce the cost of owning a house for the low-income group, as well as for speedy development, there is a need to reduce the cost of procurement of new technological equipment and other products and materials. Rationalisation of the customs duty and excise duty, will help the sector immensely in bringing down the cost of affordable housing units,” states Banerjee. “Tax reliefs through lower import duty/VAT/excise, etc., for purchase or manufacture of material used for fast house building and low-cost housing building like, prefab, plaswall, precast, etc., is desirable.”
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Sachin Sandhir, global managing director, Emerging Business of RICS, believes that the use of technology can also pool in expertise, thereby, helping the cause of affordable housing. According to him, most of the stakeholders across the real estate industry, operate within their respective domains with limited inter-linkages among themselves. This has created different silos of knowledge for different domains, with little understanding or sharing of knowledge across various facets of the sector.
Sandhir says, “RICS, in its research report, has recommended a cohesive approach across all stakeholders, in order to increase the annual supply of professionals and address skill-set gaps in the existing manpower. It is essential to realise that capacity building as an exercise, is not the responsibility of any single stakeholder, but requires the cooperation and commitment of all stakeholders involved in the built environment.”
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However, can small developers with one or two projects in their kitty, afford the cost of technology? As many of the realty companies are promoter-driven, in some cases, it is not even easy to make them understand the benefits of technology. A second generation developer agrees while requesting anonymity, “I understand the role of technology in bringing down the overall cost in the macro analysis. However, how should we convince the management, who has brought the business to this level with their conventional trade practices?”
That explains why technology has, so far, not been vastly applied for creating affordable housing in India. The emerging market realities nevertheless, continue to push the developers, to adopt new technologies that save time and cut the cost of construction.
(The writer is CEO, Track2Realty)
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