Do green home builders get enough incentives in India?

The government is making efforts to create awareness on sustainable development and encouraging builders to focus on green homes. The government even tried to encourage them by allowing extra FAR (Floor Area Ratio). Noida would have a number of green building, had this scheme worked for the builders. It clarifies that this incentive scheme failed to motivate builders to focus on green and sustainable housing projects.

Not just Delhi, several other states also tried to boost green development through different policies. By visiting property websites of different states you can easily get an idea of this. Till then, you can have a look at some of the incentives provided by varied states here:

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• Developers in Noida and Greater Noida were allowed to get free 5% additional FAR on projects built on an area of 5,000 square meters by adhering to 4 or 5star GRIHA Rating.
• Similarly, Jaipur government also allowed builders to use additional 5% FAR free of charge by obtaining 4 or 5star rating form GRIHA.
• In Maharashtra, builders get up to 50% rebate on premium from the Pimpri-Chinchwad Municipal Corporation by getting GRIHA certificate on their projects. They also get 15% rebate on property tax.
• In West Bengal, builders and developers get additional 10% FAR on green building as per the provision under rule 69A.

Impact of these incentives

Though governments in these cities tried hard to boost development of eco-friendly homes, these schemed didn’t seem to work. Still, Realestate in india lacks expected number of green projects. ‘Green floor space’ in the country accounts for just 3 to 5% of total construction, which is too low against UK where around 40% buildings fall in green category.

Alone FAR cannot encourage builders to increase number of green housing projects. There needs to be some policies which are beneficial for both the homebuyers as well as builders. FAR is beneficial only for builders, but buyers and property investors usually have to pay more for green projects. Its cost is one of the biggest barriers in India. Just compare prices of green residential projects on real estate sites with normal housing projects and you will understand the difference.

As per Raj Gala Shah, partner at Zara Habitats states that the ideal incentive to encourage both the developer as well as buyer should be in terms of money and time. The government should speed up the approval process for green building to help builders save money paid as interest and to help buyers get possession of their dream home quickly.

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