Passing of the Real Estate Bill will go a long way in achieving the national objective of Housing for All
The Rajya Sabha passed the much-awaited Real Estate Bill on Thursday, prompting Prime Minister Narendra Modi to hail it as “great news for home buyers.” The Bill, which seeks to regulate the property sector, brings in transparency and helps protect consumer interest. I look at it not only as good news, but as “real news”.
“Real news” after a long time. Hopefully, the passing of the Real Estate Bill in the Rajya Sabha, where the current government is struggling for majority to pass any key legislation, will pave the way for some sensible consideration by our lawmakers and allow passing of some other pending legislations, which is necessary for the timely and orderly growth of our economy. Now since the Bill is passed in the Rajya Sabha, we can expect it will soon be passed by the Lok Sabha as well and will become a law.
The “real test” for the respective governments now is to make sure the timely, orderly and efficient implementation of this initiative. In order to make sure that this proposed regulatory initiative does not become slave to the political system, two things must be ensured.
First, the selection of the regulators should not be by political nomination, but should be based on merit, qualification and experience of the candidates. The integrity and background check should be an important criteria in selecting the regulators. These positions should not become a place to park retired/retiring bureaucrats alone. The talent from the private sector should be given adequate opportunity. We have already seen the beginning of this initiative in the selection for the head of public sector banks and, hopefully, this trend will continue in the real estate sector as well.
The second important factor is related to fiscal independence. The regulatory set-up should have financial autonomy and should not be dependent on the political set-up for its funds requirements for day-to-day operations. This will ensure independence of the regulators and will also avoid unnecessary interference.
The “real estate sector” should not view this initiative as a step to rein in the errant developers alone, but should be seen as an attempt to promote one of the national agendas of the government—Housing for All. Regulators must attempt to look after the interest of not only the customers, but that of the developers as well. While the regulatory set-up should help the customers to get possession of the property they have booked on reasonable terms, at the same time the regulator should play a facilitative role for the developers to get their permissions from various regulatory bodies in a timely manner, to ensure that the projects are not delayed due to unnecessary adjournments in granting permissions.
Policies should be made in consultation with all the stakeholders in a fair and transparent manner, and the implementation of the policies should happen in a non-discriminatory manner. If we start this initiative with the impression that this is a win-win for customers and is an attempt to rein in errant developers, then we will be starting on a wrong foot.
It is not a time to look for winners or losers in this initiative, but to make this initiative a success story for achieving the national objective of Housing for All.
The author is CEO of Tathya Consulting