In an effort to check the growing malpractices in the Indian real estate sector, the Union Cabinet is likely to give its clearance for the Real Estate Regulation Bill, 2011, by the winter session of Parliament.
??There is an immense need to improve the regulatory environment, governance and transparency in the sector,?? said Kumari Selja, minister of housing & urban poverty alleviation. ??The ministry is working on a central legislation to fill in the regulatory gaps,?? while addressing the 8 th Ficci International Real Estate Summit in Mumbai on Thursday.
??I am hoping that the Cabinet clearance for the Regulation Bill comes in before the winter session of Parliament,?? the minister later told the media. The Bill, which had been in the works, got delayed owing to deliberations as to how to enact a law to govern something that is the domain of states, since land was a state subject, and laws varied from state to state. Selja told the media that the bill had gone to various ministries for their views, and the views have now come in..
??It will be a central law but will also have state regulators,?? she said. ??The regulator will have both penalising and appellate powers,?? she said. ??This regulation will lay emphasis on self disclosure, transparency, fair play and dispute resolution.?? Urging the industry to come forward to provide affordable housing, the minister also said the government is working towards a formula to allocate certain portion to affordable housing in all public and private sector housing projects. ??We are working with the states to see that the reservation does not affect the bottom line of the sector,?? she added.
In response to some of the concerns expressed by the real estate developers related to restrictions on FSI (floor space index) and FAR (floor area ratio) in India, urban development minister Kamal Nath said he may consider suggesting hike in FSI and FAR to some states depending on the infrastructure and population density in some cities of those states.
??You could see some decision on FAR and FSI hike in the next 6 months,?? he said. FSI is the ratio of the total floor area of buildings on a certain location to the size of the land of that location. The government put cap on FSI as infrastructure in most cities is not equipped to handle high rises. However, the developer community has been demanding removal of those restrictions like some of the developed nations of the US and Europe, where they have 30 and above FSI.
The realty industry argued that since there is paucity of land, India should also build vertically and the government should enable infrastructure to support that development.
The minister also said that the government is working towards bringing in a Rent Act. “We are working on a model Rent Act, which secures the owner in terms of increasing rent and also tenant rights will be looked after,” he said.