Of late, the real estate sector in the State is going through a slump. One of the major reasons attributed is the huge charges by land owners for issuance of Power of Attorney (PoA) to do business for joint development projects.
At a Press conference here on Wednesday, Confederation of Real Estate Developers Association of India (CREDAI) Odisha chairman DS Tripathy said other States have provisions for a separate category for Development Agreement Cum General Power of Attorney (DACGPA) where charges are very nominal.
In those States, DACGPA is considered as a contractual obligation, which is subject to cancellation in case of non-compliance of the terms and conditions in the agreement or failure of the builder to take up projects for any reasons and getting the mandatory approvals in time, said Tripathy.
Ironically, in Odisha, the registration authority is charging the same rate for both getting and cancellation of POA at the rate of seven per cent on market value of land in the absence of specific provision for this purpose. These unreasonable charges shoot up prices of houses. This has forced developers to sell homes at high rates. By denying a level playing field to developers of the State, the authorities have not allowed them to compete with prominent developers from neighbouring States, he said.
Notably, the charge for DACGPA is one per cent in Andhra Pradesh, Telegana and Karnataka. In Chhattisgarh, Jharkhand and Bihar it is two per cent. Similarly, in West Bengal it is Rs 75,000 maximum whatever might be the project cost.
Consequently, the investment in housing sector in Odisha has gone all time low as local consumers prefer to invest in real estate in other States due to competitive offers. Since the State Government is keen and committed to promote affordable housing, ease of doing business, Startup and Standup, there is an urgent need for creation of separate category for DACGPA with nominal fees which will go a long way to boost the sector, he said.
This action also will facilitate small and medium class entrepreneurs to fulfilling the dreams of millions of affordable home seekers. Such reformative measures will also enable the authorities to earn three to four times more revenue at the time of registration as property values become higher by five to six times after development. Further, it will encourage more new entrepreneurs to start up housing business with less investment and make the sector more competitive and standardised, said Tripathy.
CREDAI Odisha president Binay Krishna Das delivered the welcome address and general secretary Shashi Sekhar Garabadu offered a vote of thanks.