FB   
 
Powered bysps
        Society for Policy Studies
 
 

 
Buying a house in India will no longer be a nightmare
Posted:Apr 25, 2017
 
Print
Share
  
increase Font size decrease Font size
 
The Narendra Modi government has notified that the new Real Estate (Regulation and Development) Act will come into effect from May 1. Every state should now create a real estate regulator in compliance with the new law. The consequences will be a sea-change for the better in a sector of the economy that is a byword in corruption, nepotism and customer abuse. The consequences may take some years to fructify, but at the end buying property should no longer be the Russian roulette that it is at present.
 
Among other welcome measures in the new law is a requirement that a real estate developer will have to put 70% of the money buyers give them in escrow accounts. This will end the present business model under which developers use customer payments to fund new real estate projects. If something went awry with the builders’ finances or clearances, buyers were left running from pillar to post trying to get their money back.
 
Making it worse for the customer was the political clout wielded by many real estate firms. They laundered money for politicians and bureaucrats in return for being able to break the rules with impunity, including when it came to land acquisition and construction approvals. As a study by the Institute for Public Finance and Policy calculated, almost 40% of money used to buy real estate was “black wealth”. The political connection was so close cement production in India was tied to the state election cycle. The fortunes of certain developers rose and fell depending on which party was in power.
 
The Modi government cannot be faulted in its determination to take on the dark side of real estate. The new anti-benami legislation is designed to allow tax authorities to go after those who have salted away black money in real estate through cut-outs. The real estate regulator should keep developers with suspect finances or crony backing from entering the market. Finally, the new Insolvency and Bankruptcy Board of India, which has opened its door for business recently, will hopefully end the impasse over insolvent developers and their hundreds of thousands of half-finished properties.
 
The disruption to the real estate sector, normally a major driver of economic growth and job creation, will be considerable and could last a year or more. But it will be well worth it if an Indian home-buyer can assume that her down payment on a home will not mean years of litigation, occasional political thuggery or a court order saying her home is illegal and faces demolition.
 
Hindustan Times, April 26, 2017
 
 
 
 
Print
Share
  
increase Font size decrease Font size
 

Disclaimer: South Asia Monitor does not accept responsibility for the views or ideology expressed in any article, signed or unsigned, which appears on its site. What it does accept is responsibility for giving it a chance to appear and enter the public discourse.
Comments (Total Comments 0) Post Comments Post Comment
Review
 
 
 
 
spotlight image Since Prime Minister Sheikh Hasina assumed office again in Bangladesh in 2009, bilateral relations between New Delhi and Dhaka have been on a steady upward trajectory.
 
read-more
Senior representatives from the US, China, Pakistan and Afghanistan met in Muscat, Oman, on Monday to revive stalled peace talks with the Taliban, but the insurgent group failed to participate in the meeting being held after a year.
 
read-more
Ruskin Bond’s first novel ‘Room on the Roof’ describes in vivid detail how life in the hills around Dehradun used to be. Bond, who is based in Landour, Mussoorie, since 1963, captured the imagination of countless readers as he painted a picture of an era gone by.
 
read-more
India’s foreign policy under Prime Minister Narendra Modi has attained a level of maturity which allows it to assert itself in an effective manner. This is aimed at protecting the country’s national interests in a sustained way.
 
read-more
Braid-chopping incidents have added to the already piled up anxieties of Kashmiris. Once again they are out on the streets, to give vent to their anger. A few persons, believed to be braid-choppers were caught hold by irate mobs at various places. They were beaten to pulp.
 
read-more
Communist parties everywhere gather the ranks every five years to review the past, set future direction, renew political leadership and rejig organisational structure.
 
read-more
In a move lauded worldwide, King Salman bin Abdulaziz Al Saud recently issued a royal decree allowing women to obtain driving licences.
 
read-more
The death toll from Saturday’s twin truck bombs in Somalia’s capital Mogadishu has crossed 300.
 
read-more
On “Defining Our Relationship with India for the Next Century”
 
read-more
Column-image

Title: The People Next Door -The Curious History of India-Pakistan Relations; Author: T.C.A. Raghavan; Publisher: HarperCollins ; Pages: 361; Price: Rs 699

 
Column-image

Could the North Korean nuclear issue which is giving the world an anxious time due to presence of hotheads on each side, the invasion of Iraq and its toxic fallout, and above all, the arms race in the teeming but impoverished South Asian subcon...

 
Column-image

Title: A Bonsai Tree; Author: Narendra Luther; Publisher: Niyogi Books; Pages: 227 Many books have been written on India's partition but here is a firsthand account of the horror by a migrant from what is now Pakistan, who ...

 
Column-image

As talk of war and violence -- all that Mahatma Gandhi stood against -- gains prominence across the world, a Gandhian scholar has urged that the teachings of the apostle of non-violence be taken to the classroom.

 
Column-image

Interview with Hudson Institute’s Aparna Pande, whose book From Chanakya to Modi: Evolution of India’s Foreign Policy, was released on June 17.

 
Subscribe to our newsletter
Archive