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Green Buildings in India – 5 Challenges India Is Facing

As compared to a conventional building, a building that consumes less water, optimizes usage of electricity, preserves natural resources, produces less wastage and offers a salubrious living space for its residents, is known as a green building. Presently, an astounding 14 lakh houses in India are green buildings comprising 6.33 billion sqft. However, this amounts for just 5% of the total residential properties in India. India is aiming to achieve an ambitious target of constructing green buildings, which will constitute 10 billion sqft by 2022. This will double the green homes coverage to a significant 10%, which will be beneficial for the Indian environment. Incidentally, with more than 752 LEED-certified (Leadership in Environment and Energy Design) projects, India ranks third after China and Canada. Both the commercial and residential sectors are warming up to green buildings. In the case of the latter, consumers can even avail home renovation loans from leading lenders.

However, there are several challenges faced while developing green buildings in India. Here are five of them:

Misconceptions about cost

There is a huge misconception that green buildings are expensive. Whereas, in the long run, green buildings turn out to be cheaper for consumers. In reality, the construction cost is just 1% higher in the case of green buildings. Due to the widely prevalent myth of green buildings being expensive, many developers are wary of exploring construction opportunities. 

If we delve into redevelopment or renovation, to offset immediate costs, homeowners can also access home renovation loans at favorable interest rates.

The ponderous pace of approvals

Although certain states throughout the country have created policies to augment the construction of green buildings, clearances emerge after moving in the bureaucratic system at a glacial pace. For instance, average environmental clearances in the state of Maharashtra takes 6-8 months, whereas the by-laws state that it should be processed in 90 days. In a city like Mumbai, clearances can take up to 18 months.  

Lack of incentives

Developers also complain about the lack of incentives to construct green buildings. For instance, a green building certification can raise the cost of construction by 100-400 per sqft. The proliferation of green buildings requires substantial tax sops, increase in FSI and reduction in certification costs. This would encourage new and established builders to divert their resources towards constructing green buildings. 

Deficiency in skilled manpower and SMEs

There is a massive need for skilled professionals in the green building construction space. Right across policymakers to architects to engineers to contractors to workers, there is an enormous paucity of know-how and experience.

Lack of awareness

Experts agree that substantial awareness needs to be created about the benefits of residing in a green building. In the long run, green buildings offer substantial cost savings. Energy consumption would be 20-30 percent less, and water usage can be reduced up to 50%. The average monthly electricity bill borne by a middle-class household ranges from Rs 2000 to Rs 5000. Living in a green home can reduce this by almost 40%. Consumers and builders may not be aware that even lenders are playing an important part in the emergence of green buildings. Leading housing finance companies such as PNB Housing Finance Ltd offers loans specifically for green housing projects. It has raised Rs 500 crores by issuing fixed-rate bonds to IFC. However, consumers have to fulfill the home renovation loan eligibility criteria set up by lenders.  

Presently, the housing sector accounts for nearly 40% of energy consumption. By 2041, 50% of India‚Äôs population would be residing in urban areas compared to 28.4% as of today. Therefore, India must adopt the construction of green buildings on a large scale. 

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