Elan group serves its customers with the aim to generate value in the real estate sector in a way that it could contribute to building a nation. Mr. Ravish Kapoor, Managing Director, Elan Group, in conversation with CU, shares his views on the prevailing trends in the Indian real estate sector.
Concrete Update: What is your take on sustainable construction and what is your company doing in that direction?
Ravish Kapoor: Sustainable growth implies satisfying the current consumption levels without compromising on future needs. As a developing nation, each one of us has the responsibility to use and conserve natural resources judiciously. Sustainability has become a new dimension for corporates worldwide. As a responsible organization, Elan Group is conscious of leaping towards a greener future which is reflected in our endeavour to deliver energy-efficient spaces. Our focus is always on minimizing wastage, ensuring maximum value addition, and use of renewable raw materials. We are committed to the cause of sustainability across the entire supply chain process.
CU: How do you see the Indian realty sector shaping up? What is your vision for future urban development?
Ravish Kapoor: The real estate sector contributes approximately 5-6 per cent to India’s Gross Domestic Product and is the third-largest employer in India. According to India Brand Equity Foundation, the real estate market is expected to grow to Rs 65,000 crore (US$ 9.30 billion) from Rs 12,000 crore (US$ 1.72 billion) in 2019. The sector stands at the cusp of transformation due to the implementation of various policy reforms, innovation, and technological advancements. The implementation of RERA has been a key milestone for the sector which has increased transparency and accountability. It has prompted developers to revamp their operations and adhere to due diligence standards. Moreover, the establishment of Real Estate Investment Trusts (REITs) is expected to give a fillip to investment in the sector. Additionally, various policy reforms such as Smart Cities, Pradhan Mantri Awas Yojana among others, are a shot in the arm for the sector. The current COVID-19 crisis has impacted real estate. However, this is only a temporary phase and we foresee the demand to pick up once the COVID-19 situation becomes better.
CU: What are your views about the horizontal expansion realty sector and its limitations?
Ravish Kapoor: Given the fact that India is the second-most populous country in the world, horizontal development is not a solution. The land is a limited resource and there is a need to use it judiciously. Restrictive planning and land use policies not only result in under-utilization of the land but also escalates rental prices. An increase in the supply of housing along with affordable prices is only possible when there is vertical growth, liberalization of land policies and redevelopment of underutilized land. Fortunately, the Indian government has taken cognizance of this fact. In 2013, the government replaced the archaic land acquisition act with The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Land Acquisition Act, 2013) that states that land can only be acquired with approval of the 70% of the landowners for PPP projects and 80% for the private entities.
CU: Technology is transforming Indian real estate. What new technologies have you incorporated in the construction work of your projects?
Ravish Kapoor: Technology is a great enabler for the real estate sector. We, at Elan Group, have always been at the forefront of innovation and proactive in the implementation of new technologies and materials.Some of the emerging technologies leveraged by us include Low VOC adhesives, energy-efficient glasses, instalment of solar power generation system, high-performance elevators and escalators and energy-efficient air conditioning systems. Our adaptation to technology is not only limited to using new-age raw materials. We are equally striving to automate our construction techniques as well.
CU: What initiatives should the government take to aid recovery of the real estate sector from the crisis caused by the pandemic?
Ravish Kapoor: The Indian government has taken a series of initiatives such as RERA, GST and REITs to bolster the sector. These measures have been instrumental in increasing accountability besides streamlining the sector. However, certain measures need to be implemented. Firstly, the government should accord an ‘industry’ status to the sector, which will ease the problem of cash flows. There is also a need to promote smart development through the alignment of in-house production facilities with internal consumption. This can be done by granting tax exemptions and incentives. Also, there is a need to put in place, a single-window clearance mechanism for granting approvals which will ensure smooth and hassle-free operations.