Firhad Hakim (left) with Sushil Mohta in Calcutta
Calcutta, Aug. 18: Supply-side issues are creating problems for real estate developers in Bengal who are anticipating a flat rate of growth for the sector this year.
“There has been an 18-20 per cent compounded annual growth in the last few years in the real estate sector in Bengal. This year we are hoping that we can maintain that kind of growth,” Harsh Vardhan Patodia, president of the Bengal chapter of the Confederation of Real Estate Developers’ Association of India (Credai), told The Telegraph while inaugurating the Home Front 2012 exhibition here today.
Patodia, who is also the chief of the Heritage Realty group, the developers of Sherwood Estate at Narendrapur, said there was no dearth in demand for residential and commercial space, which will continue to fuel demand.
However, supply-side issues such as rising raw material cost and shortage of labour are key factors that may lead to flat growth.
“Raw material costs have increased 17-20 per cent in the last few years. Further, it is difficult to retain construction workers who are finding better opportunities elsewhere,” Patodia said.
Sushil Mohta, vice-president of Credai Bengal, said on an average wages of construction workers in other states were about 25-30 per cent higher than Bengal.
“As a result, lots of projects in the state are getting delayed,” he added.
Mohta said Credai was in constant dialogue with the state government to iron out issues on conversion of land for real estate purpose and transfer of leasehold. “We have submitted our proposals to the state government a couple of months back,” Mohta said.
Firhad Hakim, urban development and municipal affairs minister, said, “I have received their proposal. I will take up the matter with the cabinet committee (on infrastructure).”
He also said the state was looking to set up additional dwelling units under the BSUP (basic sources to urban poor) of the JNNURM scheme and Rajiv Awas Yojana.