Our aim of Housing
for All by 2022 is not possible by efforts of the Central Government or State
Governments alone. Government of India ,
State Governments and then private sector should also join in a big way. If you
consider the housing sector in the country, the contribution of the
private sector individuals, whatever you call, is also immense. They have done
a great job. We have so many prestigious projects in the country. That is why
even the FDI also is coming in this particular sector. Media has been following
the progress for last three years and has given their thumbs up to the Bill.
Almost all sections of the media have hailed the passage of the Bill because it
enhances the confidence of the consumers and investors. It ensures transparency
and also encourages accountability. That is the factor140
which was missing for many years for variety of reasons. I am not trying to get
into politics because it160 has nothing to do with
politics. It is an issue where we are trying to plug the
leakages, shortages, shortcomings, if any, and trying to improve the
system so that the system can help the people.
Jones Lang LaSalle India ,
a real estate consultancy firm, opined that the enactment of the Bill as law
will almost single-handedly revamp the way the real estate sector works across
the board, from developers and end users and investors, to lending
institutions and government agencies involved in the buying and selling of
property. Oberoi Realty, a Mumbai based real estate company, has said that the
Bill is an excellent step. One of the significant issues flagged by the
developers relates to cost of funds280 increasing on account
of requirement to deposit 70 per cent of the collections in a separate bank
account. I must clarify that the account to be maintained by the promoter is a
separate account and not an escrow account.320 Also, the
deposit of the 70 per cent is for both construction cost and land cost. Earlier
it was fifty per cent. Even the Select Committee recommended 50 per cent. Some
Members have given dissent note. I have taken note of the dissent also. I have
raised it from 50 per cent to 70 per cent subsequently. The promoters can use
the remaining 30 per cent for other expenses incurred or for any other business
purposes. After all, you need to give them a little cushion; otherwise, it is
not very easy to talk about an ideal situation. As you know,420
the promoter purchases some land, gives advance for some other land and
meanwhile, he will complete this project and go to other project. Keeping that
in mind, we have given that much cushion of 30 per cent available for him and
pending 70 per cent. That way, you are assured that the project will be
completed in time.480
A lot of projects
have taken time. Earlier, delegations have come and met every one of us. What
happened in NOIDA? What happened in Gurgaon and in some other places with the
projects of so-called big companies? People are pained. They are agonizing and
they are coming to us including some of the media friends also who have been
taken for a ride. Normally, nobody would touch media. But some unscrupulous
elements have taken even some media people for a ride.560 They
are also crying. That is why there was a positive reaction because they also
had an experience. The 30 per cent to promoter is to ensure that the project
funds are not diverted and the projects are completed on time. That is why a
stipulation of 70 per cent has been brought in. I can assure the industry that
with the establishment of a regulatory mechanism there would be greater
flow of investment because the credibility is invested,640
both national and foreign, into the sector, resulting in reduction in cost of
borrowing. Those who are saying that they are concerned should
understand the industry. I can tell them that because of this regulation, the
credibility of the sector is going to go up, acceptability is going to go up
and more investments are going to come from foreign investors700
as well as investors from other sectors also. With that, the cost of borrowing
will also come down because you will have a lot of other avenues.
Madam, the Bill
seeks to enhance the credibility of the realty sector. As I said, right
now the consumers end up paying more than what they were told at the time of
launching a project. Subsequently they say, we launched the project, that was
the rate, but subsequently this has been added, that has been added and all.
That is not allowed now. That has been put an end to. Regarding the
consequences800 of projects including the ongoing ones under
the Bill, I discussed the issue with my officials. This shall have a bearing on
the projects and consumers. In fact the Select Committee of Rajya Sabha too in
its wisdom supported and840 retained the need for regulating
existing projects. But at the same time, projects which are almost at the fag
end of completion will only need to give information. We are not going to
harass them. There is so much concern among the industries circle as to what
will happen to the ongoing projects. On
ongoing projects, whatever agreement you have entered earlier stands. You have
to fulfill the obligations which you yourself have agreed upon through an
agreement and whatever conditions were stipulated in your agreement have to be
implemented in toto.
All of what I am
proposing will apply for the future projects along with the projects which have
got stuck now. It is necessary for me to clarify that960
upon passage of the Bill, ongoing projects would not come to a standstill. Let
me make it very clear980 in the premises of the Parliament. They
will not come to a standstill, they will continue. The Bill does not
provide that the existing projects should stop all operations until complied
with the provisions of the Bill. The Bill does not say that. The Bill only
provides upon the formation of the regulatory authorities, all promoters of
existing projects coming within the ambit of the Bill would need to register
and provide and upload all project details on the website of the authority.
This is mandatory. A window of three months from the date of the commencement
of the said clauses, sections have been given to the promoters for registration
also. Reasonable time has been given. All that developers need to do is to
specify the project details of such apartments so that prospective buyers will
make informed choice, project1120 status is known to all, and
ensure that the projects are completed on time. That is the need of the hour.
Regarding the
provision of imprisonment for any violation of the orders of the regulatory
authority, some concern is expressed in certain quarters including some
sections of the media. It is certainly not a first option but only the last
option. Let me make it very clear, you will be cautioned, you will be penalized,
and if you do not adhere to the regulatory authorities order, then you will
be taken to task. Why should anybody worry? If you are not violating
any of the orders of the regulatory authority, nobody is going to touch you.
Some people are saying that this regulatory authority will be in State
headquarters and it will not be possible for every house buyer in1260
a village or town to go to the regulatory authority. It is not like that. Regulatory
authority will be there1280 and simultaneously consumer
courts which number in excess of 600 will also be functioning. Their
jurisdiction is not touched. We have the Consumer Affairs Minister here.
The consumer courts also will have jurisdiction with regard to the cases
wherein some people have a grievance. There are many regulatory laws in the
country with provision of imprisonment for three to ten years. Under the
Securities Act, the Insurance Act and the Pension Fund Act, ten years of
imprisonment is provided. Food Security Act has seven years of imprisonment.
Electricity Act has provision for five years imprisonment. There is
imprisonment provided under Reserve Bank of India Act also. It is not that
we have brought in that provision only. I am just1400
reminding them that there is a provision like this. Please be careful. That is
the purpose of putting that in this Bill and that is compoundable also.
The builder can exercise these options also at that time if something
goes wrong.1440 But at the same time the authority will
decide what to do.
There cannot be
a consumer without a developer and vice versa. So, they have to work in
unison and we have to protect the interests of both. It is
important for developers to mobile land. Land is a big issue. Madam, I want
to take a little time on this. Our projects for housing for all and affordable
housing, weaker section housing, low income group housing, all are in situ
developments also. All these things linger on the issue of land. Either
the Centre or the States1540 have to take a view on land
acquisition at the earliest. The land is acquired for affordable housing, for
the poor man’s housing, for the common man’s housing.1567
