MUMBAI: Real estate developers across the country have approached the government, raising concerns over a recent National Green Tribunal ruling that requires them to secure environmental clearances for projects from central authorities as against state agencies, saying the shift will delay projects and drive up operational costs.
Until now, the State Environment Impact Assessment Authority (SEIAA) used to grant environmental clearances to real estate projects. This system allowed local authorities, familiar with the regional geography and specific regulations—since land is a state subject—to efficiently approve projects tailored to the area’s needs.
But an NGT judgment in August unilaterally reversed this situation and directed the ministry of environment & forest (MOEF) to get all real estate projects appraised by the Sectoral Expert Appraisal Committee (SEAC) at the centre.
“This shift has introduced additional layers of complexity and delays, affecting project timelines and driving up operational costs, which could hinder development activities, particularly for smaller players in the industry,” said Hari Babu, national president of realty developers’ body, the National Real Estate Development Council (NAREDCO).
According to him, realty industry projects can be granted a special package and continue to be assessed at the state level by the respective SEIAA to boost housing infrastructure in view of the Pradhan Mantri Awas Yojna.
While another body, the Confederation of Real Estate Developers’ Associations of India (CREDAI), has filed an appeal before the Supreme Court against the NGT order, NAREDCO has reached out to the MOEF and ministry of housing and urban affairs (MoHUA) making their representation on this matter.
The issues have amplified with SEIAA across states having started to defer all applications on the ground that such projects are to be appraised by the central SEAC. Even applications made prior to the NGT order have been deferred. Further on account of the NGT order, fresh applications will now be required to be made to central SEAC.
“Appraisal delays are jeopardising projects and causing economic losses across the real estate industry, impacting commitments to financiers, societies, tenants of redevelopment projects and allottees. These delays also increase the backlog, disrupting the economic cycle and affecting project viability,” said another developer.
It is pertinent to note that in cities like Mumbai, close to 70% projects are in the vicinity of areas notified under the Wildlife Protection Act or eco sensitive zones or severely polluted areas, etc. Such projects would now have to be appraised at the central level and this is likely to compound the delay further.
This, according to experts, would also defeat the end objective and legislative intent to have such realty projects reviewed and appraised by state expert committees having local geographical knowledge and expertise.
Developers are suggesting that real estate projects located in a particular region be appraised by the local authorities and the government can give appropriate directions to provide some urgent holistic relief to the approval system, which is currently flawed.
They are of the view that it would be prudent for large-scale public impacting projects, such as dams, national highway, thermal power plants, etc, to seek central approval but real estate projects be appraised only by local authorities.
