02-05-2017 (Important News Clippings)
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Date:02-05-17
Subverting RERA
States are not raring to go, but real estate development depends on this
Land use comes under the purview of state governments in India. Therefore, they were to use last year’s central legislation as a guide to enact subordinate legislation to flesh out details and also establish a real estate regulator by end April. However, states in general have been behind schedule with a just a handful completing both aspects. Not only have states been lethargic, most have been plainly reluctant to follow the spirit of the central law. Consequently, states’ subordinate legislation has often diluted important pillars of consumer protection in the central law.
The essence of the central law is to enhance disclosure requirements of builders, narrow existing information asymmetry between buyers and builders, and ring-fence the money paid upfront by buyers. These are elements of the basic framework of consumer protection in real estate transactions. Take away even one of those elements and the environment turns against hapless buyers. But Haryana’s rules, for instance, dilute disclosure requirements which keeps the environment uncertain for buyers. Reform in real estate will be effective only if states embrace the spirit which undergirds the central legislation.
Both states and the NDA government at the Centre must work in tandem to protect consumer interests. Many large real estate markets such as the one in Maharashtra and National Capital Region are under the control of BJP-led administrations. That ought to facilitate such coordination at least in these instances. But it is important that all states move fast on legislation and establishment of the relevant regulatory bodies. One of the factors holding back real estate sector is the trust deficit between builders and buyers. Changing the status quo here will benefit everyone. Governments should not allow vested interests to hold them in thrall.
Date:02-05-17
Sebi reforms
It is time for a Swachh Market Abhiyan
India’s publicly listed companies are seeped in a promoter culture that overshadows their public obligations. This means two things. If the promoters are ethical, transparent and take their responsibilities seriously, the company behaviour reflects that.On the other hand, when promoters see a stock market listing as cheap big bucks, the dirty games begin. It makes their firms schizophrenic, a twin personality, if you like — public for tapping money, but less transparent on just about all else from governance to accounting.
In this highly muddled environment, chicanery rules. So-called independent directors are typically friends or retired bureaucrats with experience of navigating complex government red tape. In public sector firms, gatekeepers are often picked from a cabal of known associates — folks who can hardly be expected to raise ared flag. Team this with a mandated free float of just 25% and it’s easy to see how the market lends itself to malfeasance. This is true especially for small to mid-sized companies.No more brushing it under the carpet
Often, the public shareholding is held by institutional investors or big traders with an arrangement with promoters, and get early tip-offs for their cooperation. Much worse, the free float itself is cornered by promoters through an excruciating web of shell companies. Recently, the ministry of corporate affairs stated that 9,00,000 registered companies in India don’t file tax returns and are possibly used for illegal activity.The market is further distorted by traders and corrupt business journalists who collude with promoters to spread misleading stories to push prices up, or sometimes even short stock.
For all this to fade, the free float has to be large enough to make it hard to corner, and attractive enough for activist hedge funds, to play.Everywhere in developed markets, activist investors have held companies accountable for their actions, especially to shareholders. In many cases, their activism has dethroned errant executives found guilty of wrongdoing or careless in managing company funds.Several investors, even conservative Blackrock, are increasingly questioning ineffective value creation for shareholders, something regulators often fail to do.By insisting that companies free up 50% of their stock for investors, Sebi will open up the market to large institutional investors who can hold promoters accountable. A higher free float will also automatically curb promoter ability to put vast sums of money into the market to manipulate stock price.Sebi’s other challenge will come in clamping down on trading using shell companies. The government plan to digitise databases should help the regulator keep better track. It shouldn’t stop there though. Sebi will need to invest in automated surveillance that some in Silicon Valley are already developing. Using automation to weed through and marry big data from banks, Aadhaar, tax offices and the MCA can reveal manipulative trading and promoter linkages.
Traders are already ahead of the game by using algorithms for highfrequency trading (HFT), often also used to spoof the market and distort trade. And the only way to sift through legitimate trading from spoofing is through the use of artificial intelligence and machine learning that mimics trader behaviour to spot lawless trades.This is not to say it will end manipulation overnight. But at least the chance of getting caught will act as adeterrent to many.
The regulator’s real grit, however, will come from heavy punitive action against errant traders and promoters. For too long, India has tolerated a culture where traders and promoters caught red-handed get away with limp fines and continue to be active in the market even when they are barred from it. It’s a VIP culture that money and connections buy, and only one that the regulator can end. Tyagi must chart a plan to level the playing field and bring relief to small retail investors. It’s the only way to embark on Narendra Modi’s idea of ending the VIP culture and replacing it with an EPI — Every Person is Important — one.
The writer is CEO, Content Pixies
Date:02-05-17
Date:01-05-17
Romancing the Maoists
The silence of the human rights activists after an attack in which security forces are killed is telling
In a barbaric and dastardly attack by the outlawed Maoists, India lost 25 brave CRPF personnel. They were ambushed and killed by the anarchists, who are hell-bent on stalling the development of the backward tribal areas and exploiting the situation. Some security personnel were also injured. The attack shocked the conscience of every right-thinking Indian. No sympathy or monetary compensation will make up for the loss suffered by the families of the victims. Nevertheless, the government will extend all possible help to them. As Prime Minister Narendra Modi stated, the sacrifices of the brave jawans will not go in vain.
While the Maoists are an offshoot of the communist movement, the ideological warfare unleashed by them is totally out of sync with the tenets of democracy. Disillusioned with the communists who placed their faith in democracy, a section broke away to propagate and practise a violent ideology. Unfortunately, a variety of reasons, including the lack of political will and the failure of different regimes to devise a concrete strategy to combat Maoists, the backwardness of some regions and illiteracy, provided fertile grounds to the outlaws. The Maoists have a sinister design: To prevent the development of backward regions and exploit the situation by misguiding poor villagers, striking fear among them.
The Maoists cry hoarse about the government’s supposed indifference in providing basic amenities to the people. But they destroy and vandalise public properties, including schools and railway tracks. They do not want proper education and economic empowerment of the people as that would make the villagers see through their gameplan. Much like the separatists and terrorists in Kashmir, they do not want peace. Their agenda is the domination of the bullet over the ballot. That is simply not acceptable.
While the Maoists have been perpetrating mindless violence for decades, what is surprising is the support and sympathy they have received from so-called human rights activists, left-leaning columnists, armchair intellectuals and a section of the media — in the name of human rights. It should be noted that human rights are for humans, and not for terrorists. The silence of the human rights activists is as dangerous as the violence of the Maoists. Such people should realise that they are weakening the unity and integrity of the country by silently condoning Maoist violence. Terming them “Gandhians”, legitimising their violent struggle, is inexcusable.
Whenever an extremist or terrorist is killed in an exchange of fire with the security forces, human rights activists raise a hue and cry. But there is deathly silence when the outlawed guerrillas go on a rampage and kill security forces or innocent villagers. Don’t the security personnel, their families and other villagers have human rights? By their tacit support, these human rights activists are emboldening the Maoists to indulge in barbaric acts. These activists should answer if they believe in the Maoist ideology of achieving power through the barrel of a gun. It is time to expose the double standards of these activists and other so-called intellectuals who romanticise the Maoists.
It would be pertinent to recall that last month, a Maharashtra sessions court sentenced suspended Delhi University Professor G.N. Saibaba, and four others, to life imprisonment for links with an outlawed organisation, and for waging war against the country. The latest attack on the CRPF personnel, providing security to workers engaged in road construction, reflects the growing desperation of the outlawed outfit as many of its cadres have been deserting it.Left-wing extremists killed more than 12,000 people, including over 2,700 security force personnel in different parts of the country between 1994 and 2014. Among major incidents was the killing of 75 Indian paramilitary personnel at Dantewada on April 6, 2010. Twenty-five anti-Maoist protesters in Erraboru village in Chhattisgarh lost their lives to landmines laid by these extremists. On March 4, 2007, they shot dead Sunil Mahato, a Jharkhand Mukti Morcha MP. At least 44 people were killed when the Maoists bombed a bus in Dantewada on May 17, 2010; more than 150 passengers were killed when the Gyaneshwari Express derailed on May 28, 2010.
There have been several instances of the Maoists killing innocent villagers — most of them Dalit and Adivasis — by branding them police informers. On May 25, 2013, a Maoist attack resulted in the death of Congress leader and former Chhattisgarh minister, Mahendra Karma, and the Chhattisgarh Congress chief, Nanda Kumar Patel. Veteran Congress leader V.C. Shukla, injured in the incident, succumbed to his injuries. In erstwhile Andhra Pradesh, policemen, politicians and villagers lost their lives to Maoist violence. The victims include Telugu Desam leader and the-then Panchayati Raj minister, A. Madhava Reddy, and Congress MP Magunta Subbarami Reddy. Andhra Pradesh Chief Minister N. Chandrababu Naidu survived an attempt on his life in 2003.
Thanks to the efforts of the Centre and different state governments, the influence of the Maoists is now limited to a few pockets along the borders of Telangana, Andhra Pradesh, Odisha, Chhattisgarh, Madhya Pradesh, Jharkhand, Maharashtra and West Bengal. Whatever little support they get from people in these states is due to the fear of their guns. The Centre and state governments will now follow a two-pronged strategy: Strengthening and modernising the security forces and improving delivery mechanisms to ensure that development and pro-poor welfare schemes reach the grassroots level. The PM is determined that such schemes reach people hitherto untouched by them. The Maoists want to stop this, but we will not allow them to do so.
Date:01-05-17
Farm and the net
Bringing agricultural income under taxation will hurt only a miniscule section of so-called farmers
NITI Aayog member Bibek Debroy’s suggestion to tax agricultural incomes above a certain threshold has met with predictable howls of protests, including from the ruling party’s farmers’ wing. Agriculture, to quote the president of the BJP’s Kisan Morcha, Virendra Singh, is a “way of life in India”. Ergo, “can you tax a way of life?” The Narendra Modi government, too, has been quick to distance itself from Debroy’s “personal views”, with Finance Minister Arun Jaitley stating that the Centre neither has powers under the Constitution nor plans to “impose any tax on agriculture income”.
Such reactions are only to be expected in a country where no party or government wants to be perceived as anti-farmer, even if the proposed measure in this case will make no difference to the vast majority of those engaged in agricultural activity. As per the 2010-11 Agriculture Census, over 95 per cent of India’s 13.84 crore operational holdings are of below four hectares (10 acres) size. Not many farmers falling within this holding limit — barring those growing very high-value crops under assured irrigation conditions — would be drawing an annual income above Rs 5 lakh, which currently attracts zero personal tax liability with rebate. Moreover, agriculture could be treated as a business for tax purposes, with all expenses relating to it — whether on farm inputs, labour, interest, crop insurance premium or leased land rentals — being deductible from income. Farmers can also be entitled to claim depreciation on fixed assets — from tractors and drip irrigation systems to cattle — and carry-forward/set-off their losses from year to year or against income from other sources. This will not only ensure that the bulk of agricultural incomes remain untaxed, but also incentivise farmers to undertake productivity-boosting investments in their land. Genuine farmers or those cultivating less than, say, 10 acres — it could be higher for un-irrigated holdings — will, thus, have nothing to fear if agricultural incomes are brought under the tax net. On the contrary, once we know the real incomes of farmers, it is possible for the government to even supplement these through direct payment programmes — which is how it is in advanced countries, whether or not agriculture is a “way of life” for them.
The voices of opposition to the taxing of farm incomes today are primarily coming from politicians, Bollywood stars, stockbrokers and other assorted high net-worth individuals, who clearly don’t need agriculture to sustain their “way of life”. For many of them, section 10(1) of the Income Tax Act is simply a provision that facilitates tax avoidance/evasion through declaration of farming as a source of income. The time has come to call the bluff on these so-called farmers.
सामाजिक काम के वित्तीय मापदंड
सीएसआर फंड यानी कॉरपोरेट सोशल रिस्पांसिबिलिटी फंड यानी कॉरपोरेट सामाजिक उत्तरदायित्व कोष पर पहुंच बढ़ाना फंड खोजते गैर-सरकारी संगठनों की रणनीति का आज एक प्रमुख हिस्सा है। इन्ही संदर्भों में स्थितियां यहां तक पहुंच गई हैं कि कतिपय गैर-सरकारी संगठन अपनी वेबसाइटों में अपनी विशिष्टता यही बताते हैं कि वे कॉरपोरेट घरानों के लिए सीएसआर के काम करने व करवाने में पारंगत है, और इसके लिए उनसे संपर्क किया जाए। विडंबना तो यह है कि जो प्रावधान कॉरपोरेट को सामाजिक रूप से ज्यादा जिम्मेदार बनाने के लिए लाया गया है वही प्रावधान हमारे देश में सामाजिक गैर-सरकारी संगठनों, आम जन व कहीं-कहीं सरकारों को भी अपनी सामाजिक जिम्मेदारियों के प्रति अपेक्षित समर्पण से भटकाता हुआ भी दिख रहा है। सीएसआर से पैसा लेना व देना भी अवांछित तथा अनैतिक दलालों के माध्यम से होने लगा है। सीएसआर के धन को पारदर्शी ढंग से न बांटने के आरोप भारत सरकार के प्रतिष्ठानों पर भी लग रहे हैं। दो-तीन साल पहले की ही बात है कि भारत की नवरत्न कंपनियों में से एक का मामला उत्तराखंड में भी उठा था, और सही भी पाया गया था। स्पष्टता इस संदर्भ में भी करना चाहूंगा कि सीएसआर को लेकर अधिकांश की चिंता खांटी सामाजिक संगठन व सामाजिक व्यक्तियों को लेकर है, अन्यथा सीएसआर के धन के मोह में व उसे परोक्ष रूप से अपने पास रखने के लिए खुद सरकारें तथा कॉरपोरेट घराने अपने ही अधिकारियों व परिवारियों को लेकर गैर-सरकारी संगठन बना रहे हैं। कुछ राज्य सरकारें इस बात को लेकर भी खासी खफा दिख रही हैं कि कॉरपोरेट घराने अपनी ही संस्थाओं से सीएसआर के फंड से काम कराने लगे हैं, व उनके हिस्से कुछ नहीं आ रहा है। अत: अपने हित में इस संबंध में वे नियमन की भी बात करने लगी हैं।
अपनों को रेवड़ी बांटना शायद इसलिए भी हो पाता है कि सीएसआर का फंड किनको दिया जा सकता है, तथा किनसे कार्य करवाया जा सकता है और कहां खर्च किया जाना है, यह अधिकांशतया सीएसआर के लिए वित्त प्रदान करने वाली संस्था के ऊपर ही छोड़ दिया गया है। साथ ही यह भी अपेक्षा की गई है कि वे प्राथमिकता में धन उन्हीं क्षेत्रों में लगाएंगी जहां वे काम कर रही हैं। अनौपचारिक रूप से धनिकों द्वारा सामाजिक सरोकारों में धन लगाना तो सदियों से पूरे विश्व में प्रचलन में था, पर बीसवीं शताब्दी के प्रारंभिक उत्तरार्ध में ही पश्चिम में सीएसआर को ठोस रूप से प्रतिपादित व प्रचलित करने का काम हुआ। इसके अंतर्गत व्यावसायिक घरानों द्वारा एक अच्छे जिम्मेदार नागरिक के तौर पर आवश्यक रूप से सामाजिक जिम्मेदारी निभाने का सिद्धांत दिया गया। आज तो कई देशों की सरकारों ने कॉरपोरेट घरानों को सामाजिक कार्यों में एक निश्चित लाभांश को लगाना कानूनन बाध्यकारी बना दिया है। भारत में भी मनमोहन सिंह सरकार के कार्यकाल में अगस्त 2013 में कंपनी विधेयक-2012 संसद से पारित हुआ था। इसके जरिए पांच सौ करोड़ नेटवर्थ से या उससे ज्यादा की कंपनियों या जिन कंपनियों का सालाना कारोबार एक हजार करोड़ रु. या उससे अधिक है या जिनका शुद्ध लाभ पांच करोड़ रु.या उससे ज्यादा है, उन्हें अपने पिछले तीन साल के शुद्ध लाभ के औसत का दो प्रतिशत सीएसआर में खर्च करने की वैधानिक बाध्यता तय की गई। कंपनियां खुद सामाजिक कार्य करें यह आवश्यक नहीं था। अनुमन्य फंडों में दान व अनुमन्य गतिविधियों में खर्च, दोनों भी एक साथ किए जा सकते थे। उदाहरण के लिए, प्रधानमंत्री राहत कोष में धनराशि देते हैं, तो वह भी उनका सामाजिक दायित्व निभाना माना जाएगा। दी गई राशि पर आनुपातिक टैक्स छूट दी जाती है।
निस्संदेह व्यावसायिक कंपनियां सीएसआर के धन का खर्च चैरिटी के रूप में तो नहीं करेंगी, क्योंकि कंपनियों में अंशधारकों का भी पैसा लगा होता है, जो अपने लगाए गए पैसे में बढ़ोतरी चाहते हैं। अत: रणनीतिक रूप से कंपनियां ऐसे धन से अपनी गिरती साख को बचाने, सत्ता व काम के लोगों से अपने संबंध ठीक करने, अपने खिलाफ क्षेत्रीय असंतोष को कम करने, परोक्ष रूप से अपने उत्पादों के बिक्री क्षेत्रों को बढ़ाने की भी कोशिश में लगी रहती हैं। जब इस तरह के जाल में सामाजिक कार्यकर्ता, सामाजिक संस्थाएं, आंदोलनकारी फंस जाते हैं तो उनमें अन्याय के प्रतिरोध और सही के पक्ष में खड़े होने की नैतिक प्रतिबद्धता में कमी आती है। जल विद्युत परियोजनाओं, खनन कार्यों, जीएम फसलों, रासायनिक खेती से पैदावार बढ़ाने वाली कंपनियां, जंक फूड तथा कोका कोला जैसे जल का बेहद उपयोग करने वाले या पर्यावरण को नुकसान पहुंचाने वाले उद्योग जब सीएसआर में धन लगाते हैं तो उनके छुपे एजेंडे की भी अनदेखी नहीं की जानी चाहिए।
सामान्य समझ से तो यह मान ही लिया जाना चाहिए कि कोई भी व्यावसायिक प्रतिष्ठान सीएसआर में भी जो पैसा लगाएगा, उससे व्यावसायिक लाभ अवश्य लेना चाहेगा। यह चैरिटी या दान का काम या परलोक सुधार का काम तो हो ही नहीं सकता। समय आ गया है कि सीएसआर को हम अपने विवेक व न्याय के तराजू में तोलें व धन की ग्राह्यता पर विचार करें। एक तो है खुद गंदगी करते हुए, नुकसान करते हुए धनवान बनना और फिर दूसरों को गंदगी उठाने, नुकसान कम करने के कामों के लिए पैसा देकर अपने को सामाजिक जिम्मेदारियों में खरा दिखाना, और दूसरा है, खुद समाज को नुकसान न पहुंचाते हुए सकारात्मक सामाजिक कार्यों में अपना लाभांश लगाना।
सीएसआर केवल समाज के लिए धन देने से नहीं आंका जा सकता। आकलन में यह देखा जाना चाहिए कि वह लाभांश कैसे कमाया गया। कालाबाजारी से, भ्रष्ट तरीकों से अथवा सामाजिक-प्राकृतिक साझा संपदाओं भूजल भंडारों, जैव विविधता व आमजन के स्वास्थ्य को नुकसान पहुंचा कर? लाइसेंस-परमिट राज में धन कमाने, काम हासिल करने में भ्रष्ट तरीकों तथा ‘पहुंच’ की असरदार भूमिका थी। इस प्रक्रिया में जगह-जगह काला धन भी पैदा होता था। इस तरह अर्जित धन को कॉरपोरेट सोशल रिस्पांसिबिलिटी में इस्तेमाल करना यानी सीएसआर में ईमानदारी व नैतिकता के मानदंडों की अवहेलना करना क्या ठीक होगा? कौटिल्य ने भी नैतिकता से व्यापार करने की बात कही है । बापू तो उद्योगपतियों को कमाए गए धन का खुद को मालिक मानने के बजाय ट्रस्टी मानने की सलाह देते हैं। यदि इस सलाह का पालन हो जाए तब तो यह सीएसआर का उच्चतम मानदंड स्थापित करना होगा।
जैसे धन को कमाने के तरीके में सामाजिक जिम्मेदारी वाली नैतिकता की बात हो वैसे ही उसे संस्थाओं को देने में व उनके द्वारा खर्च करने में भी सामाजिक व नैतिक जिम्मेदारी की बात होनी चाहिए। खासकर जब एनजीओ संचालकों पर तरह-तरह के आरोप लगते हैं, कि परियोजनाओं के लिए मिले धन को वे व्यक्तिगत हितसाधन व कभी-कभी विलासता में भी लगाते हैं। एक महत्त्वपूर्ण कसौटी यह होनी ही चाहिए कि जो प्रतिष्ठान सीएसआर के अंतर्गत सामाजिक कार्यों के लिए सामाजिक संस्थाओं को अपने लाभांश का हिस्सा दे रहे हैं, क्या वे अपने व्यावसायिक व्यवहारों में सामाजिक कर्तव्य-पालन करते रहे हैं? जिनका व्यवहार ऐसा नहीं है, क्या सामाजिक संस्थाओं को उनसे जुड़ना चाहिए? या पहली प्राथमिकता में क्या सामाजिक संस्थाओं के लिए यह ज्यादा सही नहीं होगा कि वे ऐसे घरानों को अपने को सोशल आॅडिटिंग के लिए प्रस्तुत करने को प्रेरित करें। हालांकि यह बहुत आदर्शवादी विचार है, पर जब तक ऐसा नहीं होता तब तक यह डर तो बना ही रहेगा कि सामाजिक दायित्वों के लिए निर्धारित कॉरपोरेट धन आम जन और सामाजिक संस्थाओं को उनके अपने सामाजिक दायित्वों से डिगा सकता है।
Real Estate Act: Reining in the sharks
The Real Estate Act largely addresses consumer interests, but some creases are still to be ironed out
The much awaited Real Estate (Regulation & Development) Act is now in effect. The Ministry of Housing and Urban Poverty Alleviation recently notified 69 out of the 92 sections in total, which set the ball rolling for States to formulate, within six months, rules and regulations as statutorily mandated. Since land is a State subject under the Constitution, even after the Centre enacts the legislation, State governments will have to ratify them. States will have to set up the Real Estate Regulatory Authority’s (RERA) and the Real Estate Appellate Tribunals and have only a maximum of a year from the coming into effect of the Act to do so.
The Act’s preamble details the legislative intention which is to primarily protect the interests of consumers and bring in efficiency and transparency in the sale/purchase of real estate. The Act also attempts to establish an adjudicatory mechanism for the speedy redress of disputes. RERA and the Appellate Tribunal are expected to decide on complaints within an ambitious period of 60 days. But no legislation can protect the interest of only one class. As one of the largest job creators, the real estate sector contributes almost 6% towards the GDP. Mindful of this, the Act seeks to assist developers by giving the regulator powers to make recommendations to State governments to create a single window clearance for approvals in a time-bound manner.
Moving towards transparency
Key provisions of the Act include a requirement for developers to now register projects with RERA prior to any advertisement and sale. Developers are also expected to have all sanction plans approved and regulatory clearances in place prior to commencement of sale. Subsequent changes have to be approved by a majority of buyers and the regulator. The Act again ambitiously stipulates an electronic system, maintained on the website of RERA, where developers are expected to update on a quarterly basis the status of their projects, and submit regular audits and architectural reports. Notably, non-registration of projects is a serious matter. If there is non-compliance, RERA has the power to order up to three years imprisonment of the promoters of a project.
Importantly, it requires developers to maintain separate escrow accounts in relation to each project and deposit 70% of the collections in such an account to ensure that funds collected are utilised only for the specific project. The Act also requires real estate brokers and agents to register themselves with the regulator.
Builder grievances
While consumer interests have been protected, developers find provisions of the Act to be exceptionally burdensome on a sector already ailing from a paucity of funds and multiple regulatory challenges. The builder lobby has been demanding “industry” status for the real estate sector as it would help in the availability of bank loans. Real estate companies say that most delays are because of the failure of authorities to grant approvals/sanctions on time. While the Act addresses some of this, it does not deal with the concerns of developers regarding force majeure (acts of god outside their control) which result in a shortage of labour or issues on account of there not being a central repository of land titles/deeds.Some of these concerns are legitimate but the real estate sector has become a sort of untamed horse galloping in all directions. The cracks emerging in their books are largely of their own making. Once 100% foreign direct investment was permitted in real estate, international money flooded the market. Builders/developers overstretched themselves and diverted funds while some began to cross-invest in non-core activities. In the race to announce the next “mega project” one came across, in many instances, real estate companies embarking on projects without even consolidating land.
Like with any new legislation, it takes time to iron out the creases. In fact, the 22 sections still to be notified relate to functions/duties of promoters, rights/duties of allottees, recovery of interest on penalties and other offences. It appears that the law makers have consciously delayed the notification of these provisions till such time as regulators, developers and buyers familiarise themselves with the new legislation.
Eventually the benefit of any statute is contingent on its effective implementation. Despite a model set of rules, only a few States have notified their rules. The onus is now on States to formulate rules and establish the regulatory authorities on time. There shouldn’t be just paper compliance, by designating an existing authority to take additional charge as the real estate regulator, as that would affect the timeliness prescribed under the Act.
Finally, the new legislation is a welcome enactment. It will go a long way in assisting upstanding developers. More importantly, it will ease the burden on innocent home buyers who put their life’s savings into a real estate investment in the hope of having a roof over their head but often find their dreams come tumbling down.
Satvik Varma is a corporate commercial lawyer in New Delhi
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