He spoke to the Herald about the industry, the current business environment and suggested ways to improve the situation. Excerpts of the interview.
HERALD: How did you get into the construction space?
Jitendra Agarwal: About 7 years back, we, a group of college friends got together and just decided to start this business. We found this a very promising area to venture in and hence Milestone constructions was founded
HERALD: Any new projects in the offing?
JA: We are planning a new project near Maruti mandir, Vidyanagar, Margao. It is a residential cum commercial building. It will have high quality 2 bedroom apartments and we have ensured that all the shops will have very good frontage and visibility. We have also made provision for a good spacious parking area.
HERALD: What is the USP of your projects?
JA: I think location and quality of construction. We search very hard to get good land and our construction quality speaks for itself. We ensure that we give high quality finishes to our properties.
HERALD: How has the market been in the last 2-3 years?
JA: The last 2 years have been very bad for the industry. Because of closure of mines people are not investing much in real estate. The Floor Area Ratio in panchayat areas has been reduced and the cost of construction is on a constant rise. This means that we need to increase the rates of the property to make profits. This has taken the affordability of property further away from the grasp of the common man.
HERALD: What changes do you see in the industry?
JA: Earlier we used to do projects in village panchayat areas, but now we try to concentrate only on projects within city limits. Different panchayats have different rules and regulations and often we have seen developers face opposition from the locals. So building in the city is more viable.
HERALD: Has there been a correction in prices?
JA: There has not been too much of a correction within city limits as there is still a good demand for those properties. In fact it has been on a constant rise. However the rise is not as fast as it was a few years back. This is just the opposite for properties in panchayat areas.
HERALD: What are the problems plaguing the industry?
JA: Liquidating inventory. Because the land prices have not reduced and the construction cost has increased, so overall the prices has not reduced much.
HERALD: How have you overcome them?
JA: By going in for small projects and completing the projects as fast as possible, thereby reducing overheads and maximizing profitability.
HERALD: Are there any implications for end user as a result of these problems?
JA: The end user has to pay much more for the property. Besides infrastructure tax. There has been an increase in stamp paper duty and other fees. The ever increasing cost of construction together with the soaring prices of land have left a big hole in the pocket of the end user
HERALD: What can the government do to improve the situation for the industry?
JA: Govt should reduce the taxes levied on the construction industry. Like stamp duty, infrastructure tax, etc. Also the govt should introduce a single window clearances for all approvals including conversion plans. All the delays in granting approvals only add to our overheads. The construction industry is going through a bad phase and the govt should support the industry.
