Will AAP’s Win Cause a Turnaround in Delhi’s Real Estate Scenario?
On February 10, 2015, the Aam Aadmi Party (AAP) claimed a stunning victory in the Delhi elections, led by its party president Arvind Kejriwal who is now the Chief Minister of Delhi and has a very clear manifesto, especially when it comes to giving Delhi a makeover. No matter what industrialists think of AAP’s manifesto and agendas, there can be no doubt that at best, the utter congestion, pollution and lack of basic amenities for the common people are issues that will be addressed by the party. If executed well, AAP’s plans can ensure that there are many positive outcomes in the city that can, in the long term, benefit the city’s real estate market.
Delhi has seen a huge demand of affordable housing and prices that do not match and are skyrocketing. There is also a dearth of green and open spaces and the DDA’s plan to have green buildings is only slowly gaining traction. Solar energy seems to be on the AAP’s radar, so it will be interesting to see what they do with the plan. More than ever, affordable housing is the topmost priority for people in the city and is the reason why they are looking at places like Faridabad and Gurgaon in order to find houses for reasonable prices. The AAP could address this need fairly and squarely.
The low-income and mid-income segments are in need of affordable houses and the AAP plans to use 200 acres of land in possession of the Delhi Urban Shelter Improvement Board (DUSIB) to create over 5 lakh houses. In fact, Section 21(2) of the DUSIB Act stipulates that the board can build houses for the poor.
AAP and its manifesto for Delhi
The AAP has released a 70-point agenda to improve Delhi, and that includes addressing issues like women’s safety, public health, metro connectivity, clean water, sanitation and helping rural areas to become self-sufficient. Some of its highlights include:
- Legislating the Delhi Jan Lokpal Bill
- Legislating the Swaraj Act so that the people have a say in the governance
- Full statehood for Delhi
- Reducing electricity bills by half and improving on Delhi’s power station, apart from giving a chance for people to choose between electricity providers
- Leveraging solar energy and other alternate and renewable sources
- Access to clean drinking water at affordable price, with free water of up to 20 kiloliters per household every month.
AAP’s agenda and how it will impact Delhi
Giving full statehood for Delhi could ensure more efficiency. Delhi has many agencies governing it, with the Delhi Development Authority developing a master plan to change the city’s functionality. The New Delhi Municipal Council and the Municipal Corporation of Delhi also manage the city and the creation of so many municipal bodies dilutes efficiency.
Real estate
Delhi is one of the eight major real estate markets in the country but with new smart cities coming into the fore and fringe markets like Gurgaon, Faridabad, Jaipur, Mysore and more slowly becoming prominent, Delhi will go on to hold little weight. For one, it has 7 out of the 43 Lok Sabha seats. AAP’s victory will pressure the BJP to do more in terms of reforms. Power sector stocks and real estate stocks may not drop much and even if they do, industry experts say that they constitute a small portion of the national market. Besides, prices in all the major markets have gone unreasonably high and a correction is long overdue.
Problems to tackle
Going forward, the Land Acquisition Bill could be a point of contention. AAP is against the Bill and it would be good if everyone could arrive at a consensus with respect to the ordinances. Similarly, there is a lot of uncertainty about foreign institutional investments and their view of AAP.
Social infrastructure
The biggest strength on AAP’s side is its apparent commitment to social infrastructure and basic facilities. Without basic facilities, there is no use of high-tech parks and special economic zones. AAP is also being ethical with demolitions of illegal properties across the city and will focus on slum rehabilitation in the city, apart from job creation, housing and education loans.
Industry
Unlike Bengaluru and Pune, Delhi has not captured the IT and service sector industries by storm. AAP plans to encourage start-ups by starting ‘incubation centres’ in schools and colleges. Other plans include Wi-Fi access in the city.
All these aspects are in one way or the other associated with real estate in the Capital, and it remains to be seen if AAP and its steps as a government can overhaul the real estate market in the nation’s capital.
Aam Aadmi Party (AAP), AAP agenda, Affordable Housing, affordable housing project, Delhi Jan Lokpal Bill, Delhi Urban Shelter Improvement Board, DUSIB, special economic zones
