With the Rajya Sabha approving the Real Estate (Regulation Development) Bill, 2016; it has now become law. “The purpose of the Real Estate Regulation is positive; and we will see a more transparent, more professional real estate industry in India. Real estate development companies will reflect positive changes as a result of the regulatory law,” said Niranjan Hiranandani, MD, Hiranandani Communities and Founder-President National Real Estate Development Council (NAREDCO - Maharashtra).
From the consumers’ perspective, regulation will enhance the credibility of the real estate sector as also is expected to boost the confidence-level of consumers by promoting transparency and accountability. “It will encourage orderly growth through efficient execution of projects, professionalism and standardization, I expect ‘positive sentiment’ as the reaction of home seekers,” he added.
The Union Budget for 2016-17 has provisions that will help promote affordable housing, effectively helping make the Prime Minister’s initiative of ‘Housing for All by 2022’ a reality. The Bill being passed by the Upper House of Parliament is the next positive step, and it should result in making the Prime Minister’s initiative a reality. I see the Regulatory Law as being a logical extension of the Government’s focus on ‘ease of doing business’ and ‘digitization to achieve better transparency’. In Maharashtra, Chief Minister Devendra Fadnavis has already started with the required steps to reduce time taken to get clearances and permissions, and we hope it will also include single window clearance in the near future. If these aspects work out, then real estate developers will not have any major issues as regards the Regulatory Law. But, if permissions and clearances take long, delays will follow – and if 70 per cent of project funds are to be kept in an escrow account, the mounting interest costs will push prices higher. Effectively, we need time-bound clearances and permissions with single-window clearances if the regulatory law is to work equally for good of the home buyer, the real estate developer and all stakeholders, said Niranjan Hiranandani.
“Hopefully, the Bill being passed by the Rajya Sabha into a law will also make it easier for the long pending demand – infrastructure status – to become a reality. This will help the real estate industry access low cost institutional credit, which should be a positive for all stakeholders,” he said.
“Another point which needs to be factored in is that taxes relating to real estate have gone up hugely – and this does not help keep prices low. While the passing of the Bill into a law is indeed positive, the industry will keep waiting for other positives which will help make Prime Minister Narendra Modi’s dream of ‘Housing for All by 2022’ a reality,” he concluded.
~ Niranjan Hiranandani is Founder & MD, Hiranandani Group, his recent initiative is Hiranandani Communities. He is the Founder and First President (Maharashtra), National Real Estate Development Council (NAREDCO), which works under the aegis of Ministry of Housing & Urban Poverty Alleviation, Government of India.
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