To bring the Indian property industry on par with the global real estate sector, the Indian parliament is gearing up to pass the much talked about real estate regulatory bill in the winter session. The industry is keenly watching out for this one as the first draft was found to be faulty and rather lopsided , excluding the government bodies from its purview. So while the experts feel that it is time to have a single-point regulatory body on the lines of SEBI or TRAI, which would prove beneficial in the long run to the endusers and developers, there is also a cry for bringing total objectivity and professionalism in the workings of the body, to truly achieve its goal. Developers also point out the dangers of overregulation in an industry that already faces several stumbling blocks.The bill seeks to grant approvals to projects on certain parameters and also expedite all the approval processes mandatory for projects to take off. It is expected to help improve transparency in the sector by rating developers on their financial strength in terms of turnover, liquidity and profitability, scale of operations, intellectual expertise based on the qualification and experience of the management team, and past performance.

According to Ashutosh Limaye, associate director (Strategic Consulting), Jones Lang LaSalle Meghraj, “The stock market has SEBI to provide guidelines, define conduct and processes, provide a redressal system for both buyers and sellers and install necessary consistency and standardisation. The proposed real estate regulatory body intends to do the same for the Indian property market, which currently presents a rather under-organized picture.” Deepak Parekh, chairman of HDFC, had expressed the urgent need for a real estate regulatory body, which should play the role of a monitor for promoting and overseeing real estate reforms, ensuring transparency in sales and protecting buyers from a fraudulent case, if any. Parekh recommended that the state housing boards should also be brought within the ambit so that there is complete transparency in its working mechanism, the checks and balances are well achieved from every quarter.The developers have welcomed the move too, but not in its current draft form. Kumar Gera, chairman of CREDAI, India, says, “The intention is good but a lot of thought needs to go into formulating the role of the body, otherwise the effect can be counter-productive . Two main intentions are stated in the preamble: protection of consumers’ interest and speeding up the clearances to facilitate the smooth development of real estate. There are enough provisions to achieve the first objective, but I haven’t seen anything regarding the second. It needs inclusion of processes. In the present form it is likely to create more processes and hence obstacles.

The Urban Land Ceiling act was also formulated with a noble intention, but the outcome was disastrous.” R Vasudevan, MD of Vascon Developers has a similar view: “I think the intention is very good if followed in its spirit with modification to include the process of speeding up approvals. It will revamp a sluggish and a beleaguered system. In fact, no reputed developer would want a short cut to achieve his end, as his intention would be to become a long-term player. It is not in his interest to delay projects and offer bad products, as it will tarnish his image and his brand. Hence this is welcome but only if it fulfils its intent. A professional approach is the need of the hour now for all of us.”Sunny Bijlani, director, Supreme Universal, which has projects in Pune and Mumbai, says, “It is fine with us to have a regulatory body, which helps bring in transparency to the customers.We are more than happy. But they have to bring more changes in the rating system to actually do proper justice to the customers, by doing a complete financial analysis of the developers, and not just by collecting some data. Secondly, it should be a single point for all clearances and NOCs so that the project starts on time. Most delays are caused by non-availability of clearances from the government authorities.” Real estate is a major contributor to GDP growth and employment generation. The minister of urban development acknowledges this fact and feels that a single regulatory body at the state level is most needed, for faster approvals , besides faster delivery of projects, accountability of the project developers, professionalism and finally loan acquisition to make affordable housing a reality.

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