The government is clearing the decks for passage of the crucial real estate bill in the forthcoming winter session of Parliament. The urban development ministry has accepted all the amendments proposed by a parliamentary committee and is readying to move the amended legislation for Cabinet approval and finally push it through Parliament, officials said.
The ministry’s move comes after an informal Group of Ministers examined the Rajya Sabha select committee’s report on Real Estate (Development and Regulation) Bill and decided that it would be politically correct to accept all recommendations and push through an acceptable bill. A major amendment is the proposed parity in the interest payable by allottee and developer in case of any default by either party. At present the scales are tilted heavily against the home buyers.
The developers pay only 2-3% interest in case of default on their part but the consumer pays 16-18% interest for his default. The committee said in its report: “The interest rate payable by the promoters as well as by allottees shall be same in eventuality of any default by either of them.” The select committee not only reinforced the penalty provisions of up to three years’ imprisonment proposed by the government but also introduced imprisonment clause for a realtor failing to abide by the orders of the appellate tribunal
Media view: India needs a real estate regulator
A regulator to curb malpractices in the real estate sector, which is one of the biggest sinks of black money, was long overdue and is welcome.
But draconian laws make no sense. Stiff penalty for non-compliance of the appellate tribunal orders, for example, will be a huge deterrent. Projects are often delayed due to graft in the issuance of permits and clearances.
Government agencies issuing permits should be brought under the law and made accountable for undue delays. However, to end speculation in property, the government must also do away with the artificial shortage of land, which is policy-induced. States should free more land for urban development. And absurd rules on usage must go.