DELHI: Developers and builders have raised concern about some of the provisions of the Real Estate (Regulation and Development) Bill and said stringent rules such as launching projects only after getting all statutory clearances would delay projects and push-up costs. They said the government should include provisions to ensure that relevant authorities accord all approvals within a specified timeframe.
Detailing the impact of the bill on the real estate sector, executive MD of Cushman and Wakefield Sanjay Dutt said in the short-to-medium term, there could be a slowdown in new project launches as getting permissions is a time consuming process. He said the government will have to follow up with much-needed administrative reforms to speed up the approval process.
"The bill may create an upward pressure on prices as there will also be some cost implications as developers wait to launch their projects with due approvals in place," he added. Builders also slammed the provisions of the bill which is aimed at protecting consumer interests. The CMD of Supertech, RK Arora said that if the bill is implemented it would affect the supply of housing units in the market.
"The present bill is one sided as it empowers the regulator to regulate the developers without ensuring that government bodies and authorities also fulfil their responsibilities on time," said Sanjeev Srivastava, MD of NCR-based realty firm Assotech.
Another provision in the proposed Bill makes it mandatory for a developer to maintain a separate bank account for every project to ensure that the money raised for one project is not diverted. Firdose Vandrevala, chairman of CII National Committee on Real Estate and Housing, said retaining amounts realized from allottees and placing them in banks would affect the financial cash flows for projects, particularly, in metropolitan cities where the land cost component is significant and already paid by the promoter.
Credai president (elect) Getamber Anand, who is also the CMD of ATS Infrastructure, said a number of provisions in the proposed Bill could be misused "to unnecessarily delay projects." "Cancellation of registration, as provided in the Bill, can be misused and jeopardisze projects, which are well under implementation and thereby, harm even the consumers.