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NAREDCO Chairman Dr Niranjan Hiranandani highlighted that delayed execution of urban development policies and high stamp duty rates are discouraging private investment in Madhya Pradesh. He pointed out that Bhopal's development plan expired in 2005 and Indore's master plan lapsed in 2021, creating uncertainty for developers. Hiranandani also stressed that the state's stamp duty of 12.5 per cent is among the highest in India and suggested that lowering it could increase transactions. He urged timely implementation of policies, updated master plans, and regulatory clarity to boost housing supply, investment, and employment.
Delays in implementing urban development policies are slowing growth and reducing investor confidence in Madhya Pradesh's real estate sector. NAREDCO Chairman Dr Niranjan Hiranandani noted that while policies exist, their delayed execution is preventing development from taking off. He emphasized that uncertainty in planning frameworks directly affects capital inflows into real estate and infrastructure projects. Advertisement
Hiranandani highlighted that Bhopal's development plan expired in 2005, and a revised version has not yet been approved, leaving the city without an updated framework for nearly two decades. Indore's master plan expired in 2021, leaving a gap of over five years. He explained that late policy implementation slows down investment, employment generation, and overall growth, stressing that timely action is crucial for attracting developers.
Comparing Madhya Pradesh with Maharashtra, Hiranandani pointed out that cities like Mumbai and Pune maintain up to date Development Control and Regulation (DCR) frameworks. Policies in Mumbai, such as Transfer of Development Rights (TDR), slum redevelopment initiatives, and commercial development under programs like Mumbai 3.0, helped bring nearly 200 new developers from Delhi, Bengaluru, Chennai, and other cities over the past three years. He stressed that merely announcing policies is not enough; consistent execution is what drives investment momentum.
High stamp duty in Madhya Pradesh is another concern. At 12.5 per cent, it is among the highest in the country. Hiranandani suggested that reducing it to around 6 per cent could double collections, as transaction volumes would rise. He also noted that national housing schemes, such as the Pradhan Mantri Awas Yojana, aim to encourage private participation, but steep stamp duties limit the scheme's impact.
Hiranandani explained that housing and land are state subjects, making state governments key players in urban growth. He said that urban expansion in Tier 1, Tier 2, and Tier 3 cities is central to economic growth and employment creation. States need to prioritise updated city master plans and provide regulatory clarity to support development.
He also mentioned planning constraints in Indore, where the maximum floor area ratio of 1:2 restricts housing supply. Rising land costs combined with low FAR limits the number of homes developers can build, pushing up prices and affecting affordability in fast-growing Tier 2 cities. While reforms such as RERA have increased transparency, Hiranandani observed that implementation varies across states and urged better enforcement of existing policies rather than introducing new regulations without follow-through.
He concluded by noting that Madhya Pradesh has significant potential to expand its real estate and urban infrastructure sectors but needs stronger policy execution and planning to fully realise growth opportunities.
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