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Indian Real Estate News : Delhi NCR
HC order to impose a ban on use of groundwater in construction will hit supply of housing
Source: TNN Jul 21, 2012
The Punjab and Haryana high court's decision to restrain Haryana Urban development Authority (Huda) from issuing fresh license to undertake any construction activities unless builders give an undertaking of not using groundwater for construction work came as a jolt to the developers as well as the customers. The decision will affect the availability of housing and commercial real estate in the region, which will drive the prices upward and make affordable housing elusive for the middle-class households. But, it was inevitable as the state government has hardly taken any measures to augment the availability of water in the region in the last 20 years, since the time the township saw rapid urbanization. Despite experts reminding the authority to make water harvesting compulsory for all projects and ensure water supply from other areas into the township, the government did nothing to augment the supply of this scarce resource for this area.
But, if the government continues to sit pretty doing nothing, it will affect the overall development in Haryana, as the judgment will affect urbanization in the state.
Sanjeev Srivastava, the managing director of Assotech Limited, says that the judgment is definitely a shocker and should be used as a challenge by the authority to find a lasting solution to the issue. He said groundwater is a problem at many places across India, including Gurgaon.
"Most city planners project the requirement of water, electricity, transport and other infrastructure facilities with the vision document, master plan, in mind. We hope Huda will also rise to the challenge and make appropriate arrangements." Getamber Anand, the president of Confederation of Real Estate Developers' Association of India (Credai) of the NCR region, said that Credai NCR will appeal to the state government to find a solution to the problem of shortages of civic infrastructure in the region, as this is the sole responsibility of the state and should be provided by the state as there is no shortage of funds for the purpose.
The state government exacts External Development Charges (EDC) from developers in advance, at the rate of around Rs 4,000 per sq meter. Huda has collected thousands of crore of rupees as EDC but has hardly done anything to improve the infrastructure in the city, which has emerged as a major source of tax and other revenues for the country.
The judiciary should have asked for a detailed study of water availability in the entire region before announcing a blanket ban on construction activity, as this will lead to a perception of housing shortage and create a price bubble in the already stretched supply situation of housing stock, Anand said.
Sanjeev Srivastava also maintained that the state agencies should use the huge sums of money which they have been collecting from customers as external development charges (EDC). "It should be used for creating these infrastructures. We all know that urbanization very important and it cannot stop," he said. A senior builder said that if the government implemented the provisions of the law strictly in the region, it would become impossible to carry out any construction work. All the licenses are granted after the clearance of the environment department, which puts a condition that the groundwater will not be used for the construction work

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