•Kakoli Chatterjee: The main problem faced by the real estate sector is the liquidity crisis and piling inventories. How do you plan to tackle that?

I don’t believe that is the only issue the sector faces today. It’s only one of the issues. The main issue is how to stimulate demand. You’ll only buy something you can afford. Therefore, prices have to be brought down to affordable levels. The issue is, how do we ensure that a quality product is affordable? If we meet this requirement, demand will follow. We aren’t tackling this issue effectively, as an institution or as a developer.

•Kakoli Chatterjee: Earlier, big players were reluctant to play in the lower segment margins. Your homes went for Rs 60 lakh and above. So, aren’t you also responsible for crisis?

No, that is not correct. We have wrong town planning norms. Nothing can be done without approvals and approvals are in accordance with town planning norms, depending on the state. Invariably, there’s a constraint on the density, that is, the number of dwellings per acre. There is a myopic vision on infrastructure, with a regulatory control on density. We need to relax density norms. Once density norms are relaxed, the developer can make more units. But for that, we need better infrastructure. It’s not as if there isn’t enough money for infrastructure. For example, in Haryana, the entire external development has been funded by the private sector. But the government is still sitting on almost Rs 8,000-Rs 10,000 crore. In my opinion, nationalising land development was a big mistake. The private sector went out of the game and fly-by-night operators came in. They dominated the sector till the mid-1980s. The whole system, thus, got corrupted. After 1991, the mantra was to think big and create surpluses, compared to the earlier mantra of think small and manage shortages. The ‘think big’ mindset has to dominate. For instance, we voluntarily reduced prices—others have to follow.

... contd.