Why Maharashtra leads real estate investments in India?


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real estate investments in Maharashtra

Maharashtra has been recognised to have the highest investment potential amongst all other states. Here are some of the prime government initiatives that are expected to drive ROI in Maharashtra.  

Did you know_real estate investments in maharashtraMaharashtra has been proclaimed as the most lucrative investment destination for residential, commercial and industrial real estate. The latest report by Associated Chambers of Commerce and Industry of India (Assocham) asserts that the state has garnered one-tenth of the total investments made in public and private industries. More than 20 per cent of the investments made in real estate in the last five years were in Maharashtra alone. In both the cases, Maharashtra topped the investment charts and led other industrial states such as Gujarat and Odisha (Orissa).

Reasoning the investment potential of Maharashtra, Anant Rajegaonkar, Co-Chairman, Suyojit Group says, “Maharashtra is established in diverse sectors including information technology, engineering, automobiles, auto components, chemicals, drugs, pharmaceuticals, textiles and biotechnology. The state is preferred by several companies due to availability of skilled workforce. Buoyed by best of infrastructure, excellent education facilities, good demographic location, seamless land and air connectivity and impressive social infrastructure, the state offers a conducive business environment. Easing issues related to land acquisition have additionally helped change the scenario in Maharashtra and led many firms to choose it for doing business. There are many more initiatives which are being taken up by the government to boost investments in the state.”

Some of the most significant steps taken towards the same are –

  • Make in Maharashtra – This is an initiative on the lines of ‘Make in India’ campaign. It will be beneficial for further development of the state and will attract loads of investments. Moreover, the provision to cancel the need to seek a No-Objection Certificate (NOC) for using an untilised agricultural land for industrial development is expected to boost the mission. Further, allowing Floor Space Index (FSI) of up to 1 for industrial units on agricultural land is an additional initiative taken by the government to boost industrial growth.
  • Single-window approvals – “Initiatives to establish long-term relationships with global investors by bringing in reforms such as time-bound single window approvals is anticipated to significantly boost investments in the state” adds  Rajegaonkar.
  • Maha-e-biz portal - The launch of this portal for making the process of setting up an industrial unit easier will help in facilitating business by providing one stop solutions. Through this, the transactions between the industrialists and concerned government departments will be hassle free.
  • Tax reforms – Initiatives such as not levying tax on the global investors operating in Mumbai would bring them back from cities such as Dubai and Singapore. This will help the state in acceleration of mega-projects.
  • Maharashtra Industrial Policy – The policy was formulated in 2013 with the objective of achieving 12-13 per cent annual growth from the manufacturing sector.
  • Integrated Industrial Townships – “In order to thrust development of integrated industrial townships, the government facilitated utilization of area freed from scrapped SEZ projects. This will allow mixed land use development with 60 per cent area being reserved for industrial activities,” says Quaiser Parvez, Vice President – Investments, Radius Developers.
  • Infrastructure growth - The government has also been able to obtain requisite clearances for major projects including the Mumbai Coastal Road, Navi Mumbai airport, MTHL (Mumbai Trans Harbour Link), Mumbai-Nagpur Highway, etc. thus ensuring improvement of infrastructure within and between various cities. “The planned development of 600 sq km of area in Navi Mumbai under NAINA as part of the smart city mission is also one of the biggest projects being taken up by the Maharashtra government,” adds Parvez.

Collectively, all these initiatives taken at the state level definitely call for healthy return on investments in all real estate arenas. However, despite the unprecedented growth prospects, industry stalwarts outline some of the fields where the government still needs to focus on, in order to avoid failing the investors’ expectations.

One of the major areas where the real estate industry is expecting a paradigm shift is the number of approvals required for construction projects and the time taken to obtain these. Rohan Agarwal, MD, Geopreneur Group says, “Currently, the number of permits that the builders have to seek make it extremely difficult to do business in the state. There is a dire need for a systematic projects approval network. The government must give priority to Single Window Clearance in the real estate sector.”

“To reduce the time taken in getting all project approvals, the government can allow self-certification of approvals by architects recognized by municipal bodies. This will improve the turnaround time between land acquisition and project launch tremendously.”

Quaiser Parvez, Vice President – Investments, Radius Developers

Flexi land use pattern_real estate investments in maharashtraIn addition to this, a few other factors which can cause difficulty for investors in Maharashtra are lack of infrastructure in rural areas, shortage of water and power supply and lack of implementation of existing rules and policies.

Suggesting some game-changing moves, Anant Rajegaonkar, Co-Chairman, Suyojit Group says, “At the Central government level, moves like passing the Real Estate Regulatory Bill and reducing the home loan interest rates would be a game-changer for the real estate sector. At the state government level, more fiscal concessions should be extended to the sector. Some of these include reduction in stamp duty charges, rebates in guideline rates and tax concessions to various components of housing. Moreover, land reforms such as higher FAR to allow vertical growth and flexibility in land use would also boost the real estate sector.”

Finally, there is a need for the government to work on curbing the systemic corruption in the system and removing discretionary approvals. The government should also ensure the timely completion of planned infrastructure projects. 

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. 99acres does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.

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