INDORE: Delays in the implementation of urban development policies are hindering growth and discouraging private investments, stated Dr. Niranjan Hiranandani, Chairman of NAREDCO, during a discussion on Friday. He highlighted issues related to master planning and stamp duty structures in Madhya Pradesh.
“If policies are passed but executed with delays, development will stagnate and investments will decline,” he explained, noting that uncertainty in planning frameworks adversely affects capital flow into real estate and infrastructure.
He pointed out that the Development Plan for Bhopal expired in 2005 and a revision is still pending. Similarly, Indore’s master plan expired in 2021. “This results in a gap. Indore has been without an updated plan for the last five years, while Bhopal is 18 years overdue. Delayed policy execution leads to stagnation. Timely implementation is crucial for attracting investments, generating employment, and fostering growth,” he stated.
Comparing this to Maharashtra, he noted that cities like Mumbai and Pune have up-to-date Development Control and Regulation frameworks. “Every city in Maharashtra has a timely updated DCR. In Mumbai, policies such as TDR, slum redevelopment, and commercial development initiatives like Mumbai 3.0 attracted almost 200 new developers over the past three years from Delhi, MP, Bengaluru, and Chennai,” he added.
Hiranandani emphasized that timely execution, rather than just policy announcements, is what drives investment momentum. “We must act decisively. The time for policies is now; effective implementation will benefit the state,” he asserted.
Regarding taxation, he criticized Madhya Pradesh’s stamp duty rate of 12.5 percent as the highest in the country. “You collect less revenue than many states despite this high duty. Lowering it to around 6 percent could potentially double collections due to increased transactions,” he suggested.
He also mentioned that the Pradhan Mantri Awas Yojana encourages lower stamp duty to facilitate private sector participation. “How can we anticipate a boost in PM Awas Yojana in MP when it has the highest stamp duty?” he questioned.
Hiranandani explained that housing and land are state subjects, giving state governments a significant role in urban growth. “Urban development is pivotal for India’s growth. Expanding Tier 1, Tier 2, and Tier 3 cities is essential for generating employment,” he emphasized. States need to prioritize city master plans and ensure regulatory clarity.
On regulatory reforms, he acknowledged the benefits of RERA for homebuyers, although its implementation varies by state. “The law is beneficial. While there may be some implementation issues in certain areas, RERA has improved transparency,” he noted.
He also raised concerns about planning constraints in Indore, pointing out that a maximum floor area ratio of 1:2 limits supply. “With increasing land costs, low FAR restrictions lead to reduced housing supply and higher prices, which directly affects affordability in a rapidly growing Tier-2 city like Indore,” he stated.
“It’s concerning to see a state with such potential not reaching its full capability. I’m not suggesting that Madhya Pradesh is inactive, but there is significant room for enhancement in real estate and urban planning,” he concluded.
