The realty sector feels it is more sinned against than sinning, and says this is reflected in the perceived bias against it in the grant of new banking licences.
The new banking licences are still a work in progress at the Reserve Bank of India, the regulator, but the realty feels that the run-up has been far from inspiring.
REGULATORY AVERSION
More particularly the regulator's known aversion to issue of banking licences to individuals or groups with ‘exposure' to real estate sector — without really elaborating what it meant by the term.
While it rues the continued ‘bias' against what has been widely acclaimed to be a priority growth sector of the economy, the realty is also appalled that clarity should come at a premium in policy announcements.
This causes them to being interpreted by different people in different ways to suit own purposes, says Mr S. Raghuchandran Nair, Secretary-General of the Kerala Chapter of the Confederation of Real Estate Developers of India (Credai), an apex body of private real estate developers.
BAD BOY IMAGE
The RBI should clarify whether mere presence in the sector or lending thereto — or a combination of both, as is the case with some aspirant NBFCs — would be considered inappropriate when granting licences.
Speaking to Business Line , Mr Nair said it was regrettable that the realty sector should continue to wear the tag of the bad boy, despite the Government's swearing by it as one of the economy's drivers.
If there is some hanky-panky going on in the sector, which is what is being made out to be the case, the blame should squarely sit on the Government. The latter has sought to simply abdicate the responsibility to set the right the varied ills plaguing the system. Sermons about fair prices and fairer valuations would not alone help.
The Government should also look at tweaking suitably the incidence of tax, especially on long-term capital gains, to encourage buyers and sellers bring ‘white money' to the table.