Why builders want Jagan as Andhra CM

In the last five years, the city of Hyderabad has become "Greater", expanding to five times its earlier size. Land auctioned by the government here fetched as much as Rs 19 crore per acre, before recession hit the sector. This apart, the state became the country's SEZ capital with over 100 SEZs approved in AP. Predictably, it is the real estate sector that is most concerned about "the accessible'' YSR's untimely death and is now rooting for his son Jaganmohan Reddy as the next chief minister, as he alone shares his father's passion for real estate, they say.

Apprehending that a non-businessman politician would be unable to understand their business and its prevailing concerns, realtors say Jagan is the next perfect choice for the CM's post. "Jagan is an industrialist himself. He is a real estate businessman and so would understand our business better,'' said Ashwin Rao, director of Manbhum Constructions. Realtors say that Jagan not only enjoys the support of MLAs that would in turn give the state a stable government (which would be any industry's requirement), but he would also be the only person in the party who would adopt YSR's policies totally. And he is no greenhorn, they say, citing his thumping election victory from Kadapa and his acumen in handling his own firms.

Given that the state attracted infrastructure majors and the city even boasted of a brand-new 5,000-acre airport in YSR's time, city builders say that YSR was an exception among politicians as he had a unique, incisive understanding of the real estate business, a knack that his son has acquired, they say. Besides, realtors note that if earlier major real estate and infrastructure activity was concentrated in Mumbai and Bangalore, YSR brought it to Hyderabad. "He made it the most happening city and only Jagan can carry this forward, being an industrialist and entrepreneur,'' said P V S N Murthy, president, AP Builders Association.

An example of YSR's "industry friendliness", which realtors expect Jagan would show, is the reduction in the "impact fee" (paid for buildings over five floors) and development charges that builders sought just before the 2009 elections. YSR allowed builders to pay the impact fee in installments. He also controversially acquired thousands of acres of land for the Outer Ring Road project and SEZs, which in turn lead to an appreciation in land prices around and turned many farmers into crorepatis overnight, while many ere left landless.

YSR's builder friendliness was well known as he introduced a "green channel" for speedy disposal of building applications, in addition to bringing in GO 86 (new building rules, 2006) which did away with FSI completely and introduced a "mortgage rule", wherein one floor or 10% of the built-up area had to be mortgaged with the civic body. "He (YSR) even waived the 5% stamp duty and brought registration charge to a modest 2.5% for affordable housing (for flats measuring up to 1,200 square ft), the lowest in the country,'' said C Shekhar Reddy, president, Builder's Forum.

He added that realtors would like Jagan to take over as CM as he was young and serious in the business and has the vision to give the real estate sector a new direction in these turbulent times. Most significantly, builders say YSR was accessible and want their next CM to be the same. "We didn't have too much difficulty meeting him and if he would say he would take a look into it, he would do it," said Prem Kumar, president, AP Real Estate Developers Association. Clearly, a lot is riding on the next CM. Land prices would be just one of them.