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The long and short of why Bihar isn’t growing any taller lately

Bihar’s vertical growth has come to a halt lately. Construction-driven growth was at its peak in the past few years, but the

private real estate market - a contributor to this sector - has virtually come to a standstill over the past year.

The state clocked 14.48 per cent growth in 2012-13, the construction sector almost driving it with the maximum contribution — 21.05 per cent growth.

Though construction comprises of sub-sectors such as roads, railways, bridges and other infrastructure-related projects, real estate remains the single largest contributor in the private sector.

So far, Patna has led the real estate sector in the state. And Patna’s real estate market witnessed a booming phase over the past decade due to mushrooming of apartments. Multi-storeyed apartments came up in even the narrowest of bylanes, giving the city its concrete jungle look.

Though the builders’ fraternity is facing serious charges of resorting to illegal means to erect multi-storeyed apartments, there are many who feel it was a “necessary evil” for the city.

According to Census 2011, with 5,838,465 residents, Patna district is the most populated in the state. At 1,823 persons per square km, it is the second most densely populated district in the state after Seohar (1,880).

There were people and they needed houses to live in - this factor was exploited and over-exploited in the capital over the past few years. But now, both the state government and judiciary have taken measures that have brought the construction juggernaut to a halt in the city.

The urban development and housing department, through a notification issued on December 13 last year, imposed a ban on approval of maps for any multi-storey building over the height of 11 meters till the proposed Bihar Municipal Building By-laws and Building Codes come into effect.

A division bench of Patna High Court, comprising Justice Navin Sinha and Vikash Jain, during the hearing in a writ petition (CWJC- 8152/ 2013) on May 10, ordered that, until further orders, no apartment complex or multi-storeyed building taller than 11m can come up unless the entire stretch and length of road abutting the building on all sides is 20 feet in width.

Highlighting the implications of the state government’s notification and Patna High Court’s directive, Sachin Chandra, state chairman, Bihar chapter, Builders Association of India, said: “Both orders have badly hit the market. No new building project anywhere in the state, including the state capital, has been sanctioned in the past year. The total cost of held-up projects in Patna, where construction stopped mid-way after the high court order, is estimated at around Rs 10,000-12,000 crore.”

But, is it only because of the strict stand of the authorities that the real estate sector has become stagnant? Much as it appears so, it may not be the case. Experts opine the real estate sector across the country is going through one of the toughest phases and so is the market in Patna. “After witnessing a boom over the past decade, Patna’s real estate market is now going through a recession, which is normal as per business cycle and would be followed by growth once again,” Chandra said.

But while the supply of housing products has dipped in Patna, developers from the Delhi-North Capital Region are tapping a share of the ever-robust demand in the city. They are holding camps to attract buyers from Bihar. Prices in Patna’s real estate market have broadly remained unchanged over the past year.

That’s about Patna. What about the real estate scenario in other towns of the state? Some new entrants in the sector are eyeing tier-3 cities like Gaya, Bhagalpur and Muzzafarpur. “We are going to start residential projects in Patna, Gaya and Muzaffarpur over the next few months,” said Pankaj Kumar, Bihar regional head, Amrapali Group.

Though many are raising a hue and cry over the administration and judiciary’s decisions, economic pundits in the state claim such steps would go a long way in ensuring development of a systematised and picturesque urban landscape in future. “The proportion of real estate in the construction sector is marginal, thus any temporary volatility in it would not have any major impact on the economy. Moreover, twenty-first century is about urban development and it is fair that the authorities are regulating construction activities in Bihar, probably for the first time. The temporary lull would ensure safer, comfortable and beautiful buildings, and better urban landscape in the state in future,” said economist Shaibal Gupta.