In a bid to bring in transparency and safeguards for consumers, who buy properties from builders, the government is all set to enact a law to constitute a regulatory authority to look after issues relating to real estate sector, which contributes about five per cent of India’s GDP and is the second largest employer after agriculture.
Sources in the government informed that the Real Estate (Regulation and Development) Bill, 2012 is high on the agenda of the Union cabinet, which will meet on Thursday.
“Since the government intends to introduce the bill in the upcoming winter session of Parliament, it is most likely that the Union cabinet will approve the draft legislation, at the meeting of the Union cabinet on Thursday, which will be chaired by Prime Minister Manmohan Singh. The bill is being proposed by ministry of housing and poverty alleviation,” sources said
Incidentally, the real estate sector has of late assumed greater significance with a projected revenue growth to the tune of $180 billion by 2020 at a rate of 30 per cent per year from now. In the last one decade the sector has attracted about $9 billion, as 100 FDI is allowed through automatic route.
Informing further sources said, the bill, which is pending since 2009, aims to establish a regulatory authority for the sector.
“The main job of the authority would be to ensure sale of immovable properties in an efficient and transparent manner so that the interest of buyers are adequately protected,” sources said.
As per the bill, the major proposals include setting up of regulatory authority in each states, registration of builders working on projects exceeding 1,000 square meters, mandating developers to submit project details and also a few safeguarding features for real estate promoters.
The move is aimed at addressing the pressing needs of growing urbanisation, which has led to shortage of housing, land and even basic amenities like water, food, power etc. According to a report released by ministry of housing, currently there exists a shortage of about 18 million houses in urban India.
The ever rising demand and supply gap will certainly lead to rise in prices and under circumstances regulation of the sector is must, sources said.
Real estate contributes to about five per cent of India’s GDP.