India has seen numerous major policy interventions over the past few years. These reforms have resulted in India improving 23 places to rank 77th in the World Bank Ease of Doing Business ranking. Many of the key reforms have had a direct impact on the real estate industry. This is evident in India’s current ranking in the ease of granting construction permits which has improved 129 places since last year.
The Real Estate Regulatory Act (RERA) has the potential to be the most significant among these reforms. The overall goal of RERA is to protect the interests of home buyers in an efficient and transparent manner. It introduces a unified process and formality to the real estate industry that has long been fragmented and unregulated. The successful implementation of RERA will inspire home buyer confidence and be a key driver in the revival of industry.
Other important reforms include the Goods and Services Tax (GST) and the Benami Transaction (Prohibition) Amendment Act which seek to lessen the economic burden of black money. For the real estate industry, the shift towards a cashless economy has brought transparency to the valuation of properties since people can no longer buy property using unaccounted cash. This has allowed property prices to stabilize considerably.
The real estate industry has benefited greatly from the information symmetry and transparency provided by these reforms. However, there are more changes required to sustain this momentum and reach our maximum potential.
While RERA has required the real estate industry to maintain high levels of compliance, we still need to streamline processes and lessen opportunities for project delays. Registering real estate, seeking approvals and enforcing contracts are cumbersome processes. A single window clearance mechanism and the full implementation of RERA across India would address these concerns and accelerate improvements. An efficient and accessible system with transparent communication would result in a revived demand for new projects in the market.