‘Model realty regulator Act soon for States’

‘Model realty regulator Act soon for States’
The Hindu Business Line, Jan 24, 2009, Page 17

The Centre will soon bring a model Act to facilitate states to create a real estate regulator, a move aimed at checking unscrupulous elements in the property sector and keeping prices at a reasonable level.
"Based on the recommendations of the various stakeholders, including the States, the government has decided to put a model real estate regulator Act in place," Minister of State for Housing and Urban Poverty Alleviation Kumari Selja said at a realty conference.
"This was a demand which was there not only from the consumers but also from the real estate sector," she added.
The objective of such a model act is that the regulator would not only see land acquisition and development process, but also ensure that prices do not go beyond a level and to check unscrupulous elements in the sector like fly-by-night operators and brokers, the minister said.
Stating that states have endorsed the creation of such a model act in a recent meeting of State Housing Ministers, Selja said her ministry would bring out the model act at the earliest for states to follow.
"States must enact their own law for state regulator. Thats why we will come up with model act," she said, assuring that the model act would be prepared after consulting all the stakeholders.
She also clarified that there is no contradiction with the similar proposal of Urban Development Ministry to bring regulatory body for realty sector. "What urban development ministry is proposing is for Delhi. What we are doing is a model act for the whole country to follow.".
Selja expressed confidence that States would follow the model act and bring a regulator for property sector.
Selja also asked the developers to build affordable houses as there is a huge untapped demand in that segment. She emphasised that the government has announced several measures to boost the housing sector, but asked the industry to respond by lowering the profit margins.
"Today there is a lot of gap between demand and supply. The demand is from the common man and the supply is only for the high-end. The sector needs to take a look and get into the sector where the demand is," Selja said.
For developing affordable houses, she said there is a need to reduce the cost of land and construction, besides cutting on the profit margins.
"It is desirable to evolve a new framework of partnership between government agencies and private sector to supply affordable housing into the market," she suggested.
Selja noted that it was becoming very difficult for anybody to afford a good house as prices were going through the roofs. The realty sector has been hit hard as it was building high-end projects, she pointed out.

The minister also highlighted that housing construction sector has found an important place in the two stimulus package as the sector has multiplier effect on the economy.
She said the government has recently announced interest subsidy scheme for housing the urban poor. The scheme is aimed at providing cheap loans to urban poor who have a plot but do not have funds to undertake construction. An interest subsidy of 5 per cent would be given for loans of Rs 1 lakh for EWS and LIG taken during 11th plan.
The National Housing Bank and Housing and Urban Development Corporation Ltd will be the nodal agencies for disbursement of the subsidy and monitoring the progress.
"Under this ambitious scheme, interest subsidy of Rs 1,100 crore is expected to leverage institutional finance of Rs 3,870 crores for beneficiaries over the next four years," she said.