Real estate
A labourer stacks concrete blocks on his head at the construction site of a residential complex on the outskirts of Kolkata in this November 2, 2015 file photo. India's infrastructure output grew at its fastest pace in four months to 3.2 percent in September from a year ago, mainly driven by higher production of electricity and fertilisers, government data showed on Monday. REUTERS/Rupak De Chowdhuri

India's residential sector has witnessed a slowdown in the recent years, and this has led to projects worth Rs. 4.6 trillion or 4.64 lakh crore stuck in a state of uncertainty, according to a property consultant and research firm.

The consultancy firm, Anarock Property Consultants has highlighted a number of reasons including litigation, cash crunch, development construction going wrong and construction violation for the projects being delayed. 

Mumbai and Delhi have topped the list where projects worth Rs. 2.34 trillion and Rs. 1.26 trillion are stuck. Surprisingly, the value of the delayed projects in Pune is more than the combined figures of the three major cities in south India i.e. Hyderabad, Chennai and Bengaluru. It shows the builders are more disciplined in the southern part of the country than in other parts.

It is to be noted that developers including Unitech Group, Amrapali Group and Jaypee alone have over 1,20,000 apartment units in uncertainty for over three years in NOIDA alone.

The incumbent government has taken a series of steps to boost the real estate sector in past few years with the major reforms being the Goods and Services Tax (GST) and Real estate Regulatory authority (RERA) act. The Act was aimed to regulate developers and ensure that they do not run out of cash with lagging projects after taking payments from customers.

RERS is fully operational in just a handful of states such as Maharashtra, Karnataka, Gujarat, Rajasthan, Madhya Pradesh and Punjab; another 11 states have interim rules and regulations.

Although policy formulation is an important step towards a greater efficiency in the sector, property developers have overlooked another key aspect- customers' trust. Data from across country has suggested that the customers have been reluctant to buy property due to fear of delays. 

A large amount of the buyers' money is stuck in these areas and the government is trying to clear these projects. In what could be a slim ray of hope for the home buyers in Jaypee Infratech and Amrapali projects in Noida, the state-run construction company, National Buildings Construction Corporation Ltd. (NBCC) is expected to take up the projects.