Real estate sector in India is highly unregulated in nature and a deployment avenue of black money too. In the past, many efforts had been put in to regulate the sector, but there had been no conclusive action in this direction and in the absence of any regulator for the sector, professional practices did not develop fully in the sector.
''Draft real estate bill was first prepared in 2009 for creating regulatory mechanism for the real state sector on the lines of other regulatory bodies for other sectors such as insurance and telecom. The Real estate (Regulation and Development) Bill, 2013, was first introduced in August 2013 in Rajya Sabha by the erstwhile UPA government to promote the transparency and ethical business practices in real estate sector,'' CARE Ratings.
''On becoming an Act, Real estate legislation is expected to provide boost to the 'Housing for all by 2022' mission of the government by enabling increase in flow of investment. Under this bill, Real Estate Regulatory Authority (RERA) will be formed by every state and Union Territory within a year from the date of becoming an Act which will regulate the real estate transactions and will register all the projects, promoters, developers and real estate agents. Also, a separate Appellate Tribunal shall be formed for speedy disposal of the disputes in the real estate sector,'' it said.
''The Bill could catalyze the foreign and domestic investment into sector which will provide boost to the Central Government's ambitious 'Housing for all by 2022' programme and GDP growth. The Bill might result in cooling down the prices of real estate in the short term, mainly due to offloading of inventory at lower prices, as the sector is poised to move towards a regulated environment. Overall, the Bill has tried to address the major concerns of the sector, especially from the customer perspective. At the same time, upon improved transparency of the sector, lenders should be able to offer competitive rate of interest to the developers leading to decline in the project cost,'' it added.
''However, the Bill is not foolproof when it comes to the responsibility of the Government agencies whose delay in approvals may lead to the delay in project implementation. While RERA is supposed to serve home buyers as well as buyers of commercial properties, potential inadvertent fallout could be piling up of the cases in Appellate Tribunal due to constraint in government resources. It is also likely to lag on the front of curbing the pernicious role of black money and cash transactions. Nevertheless, with minor changes in the Bill, it shall largely address the constraining factors of the sector,'' it opined.
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