4 Things Real Estate Sector is Expecting From the New Cabinet
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With the National Democratic Alliance (NDA) having been voted to power in the recently concluded general elections in the country, a new cabinet of ministers will take the oath of office in Delhi very soon. The real estate sector has always appreciated the Narendra Modi-led central government for ushering in large-scale reforms during their first government from 2014-2019. The enactment and implementation of the Real Estate (Regulation & Development) Act, 2016 during NDA-I is a case in point. The new rates of Goods and Services Tax (GST) which came into force for real estate developers from 31 March 2019 will hopefully bring about a better quality of services in the housing sector. Real estate developers also have certain expectations from the new cabinet that will assume office in NDA-II.
1. Single-window Clearance
Developers have been demanding for ‘single window clearance’ for real estate projects for more than a decade now. At present, a real estate developer has to make several rounds of multiple government agencies to procure clearances or various consents require for any particular project. This process is long-winded and results in inevitable delay in possession for end-users. A single window to facilitate all permissions and clearances for a developer will avoid red tapism besides bringing in more transparency and accountability into the sector. Timely approvals will help reduce the time spent in construction and hence delivery of units will be done as per schedule.
2. Industry Status for Real Estate Sector
The central government’s decision to provide industry status to affordable housing and infrastructure is already reaping benefits. However, industry status for the real estate sector, in general, has been a long-standing logical demand of developers. Loans will be available through institutional means for big-ticket projects thereby reducing the immediate burden on developers and end-users alike. Credit availability for the sector will get a boost once sums of money are made available by the government through the general budget every year. This will, in turn, make loan availability easy even for the small players and new entrants into the sector.
3. Cheap Rate of Land
The Narendra Modi-led central government’s push to make affordable housing available for all through the Pradhan Mantri Awas Yojana (PMAY) has been commendable. The scheme is expected to get a boost in NDA-II as well with the government’s clear and committed stance to make housing available for all by the year 2022. Affordable housing falls under the price range of INR 15-25 lakh or INR 20-35 lakh. However, prohibitively high land cost is of a great hindrance for making housing units that would be available to end-users within these price ranges. The government could give a thought towards subsidising land costs for developers or making it available at cheap rates. Creation of a land pool exclusively for affordable housing could be a solution.
4. Uniformity of RERA
The implementation of the RERA Act in May 2017 has brought about great transparency and accountability in the real estate sector in India. However, the government should consider the possibility of uniform codes under the RERA all across the country. At present, different states in the country have framed their own guidelines under the Act. Uniformity in guidelines across the states is essential to ensure that penal provisions for developers and protective clauses for consumers or end-users are not diluted. The government could make amendments in the Act for uniformity in framing rules in order that will make the regulatory regime more robust.