Protesting against the unprecedented rise in construction material prices, all the Telangana construction associations have come together and took an unimaginable decision. They called for a bandh of Telangana real estate sector on April 4. Notably, CREDAI Hyderabad, CREDAI Telangana, TREDA, TBF and TDA were among those who will join the bandh. Never in the history of the construction industry in Hyderabad, has there been such an instance of announcing a bandh. However, they are forced to take this decision in the wake of the cement and steel companies hiking the prices artificially and the government’s failure in regulating them. They urged the governments to respond at least now and take appropriate steps to support the construction sector.
For the first time in eight years since the formation of Telangana, the construction sector in the State is worried. The construction sector, which has so far successfully overcome many challenges, is in a shock after the steep hike in steel price which has doubled within a matter of days. The builders associations are also scared of rising fuel prices over the last couple of weeks. They are questioning as to how long will the price rise last, the future of the construction sector if building material prices continue to rise and why either the Centre or the State are not intervening to control the artificial rise in construction material costs.
In Hyderabad as well as in the major cities of Telangana state, thousands of buyers have already bought properties at a certain price. But due to the exceptional rise in construction material prices for some time now, the builders are now not in a position to complete the construction at those prices. Under these circumstances, the building construction has become costlier by Rs 300-Rs 400 per sq.ft. However, as per the sale agreement, they cannot pass on the burden to buyers. While the builders absorbed any inflation in construction costs earlier, now the situation has gone beyond their capacity and for any new sales, they are forced to revise the prices as per the increased costs.
Surprisingly, when regulatory authorities were set up specifically to regulate sectors such as electricity, telephone and even stock market, the builders are questioning why there is no regulatory authority for steel and cement till date. They said the prices of 15 types of construction materials have gone up by about 45 per cent, and if they are artificially raising rates, they are arguing why the government was not taking any preventive measures.
The builders associations have complained that the State government has ignored their requests not to increase market value and registration fees. As a result, the common people could not afford to buy property. They said the government was happy with the record revenue of Rs 5,000 crore in March this year, but added that if the rates were not revised, the government could have earned much higher revenue due to more transactions. They pointed out that Mumbai was a good example for this where the reduction in registration fees has garnered additional revenue for the Maharashtra government.
Further, the construction companies questioned why the automobile companies are allowed to increase the prices immediately upon a hike in raw material costs, but the construction sector was not allowed to do the same. CREDAI Hyderabad General Secretary Rajasekhar Reddy, President Ramakrishna Rao, CREDAI Telangana President Murali Krishna Reddy, Chairman Ramachandra Reddy, TBF President C Prabhakar Rao, Telangana Developers Association President GV Rao and others were present on the occasion.
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