Education

Pitching for a real-estate regulator

| Updated on October 14, 2012 Published on October 14, 2012

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Real estate contributes about 5 per cent to India’s GDP;

It is the second-largest employer after agriculture;

Total revenue generated in 2010-11 stood at $66.8 billion;

Indian real-estate market is expected to touch $180 billion by 2020;

Over the next decade, the real estate sector is expected to grow by 30 per cent;

FDI exceeding $9 billion was infused into real estate in the past decade.

The above figures underline the importance of the real estate industry, as also the Government’s decision to allow up to 100 per cent FDI under the automatic route in townships, housing, built-up infrastructure and construction development projects.

The Real Estate Regulation Bill, pending since 2009, aims to establish a regulatory authority for the real estate sector, ensure sale of immovable properties in an efficient and transparent manner, and protect consumer interest. Major proposals in the bill include setting up a regulatory authority in every State; registration of builders working on projects exceeding 1,000 square metres; mandating developer to submit project details; and safeguards for developers.

Countries such as the US, Canada and China have regulators and governing licences for real-estate brokers, mortgage loan originators, property sale and trading, rental agreements, foreign investments, and so on.

When sectors such as telecom, insurance and power have a regulator, why doesn’t the real estate sector, which contributes more to the GDP, have one too?

Housing urban India

During 2001-11, the urban population of India grew at a CAGR of 2.8 per cent, and urbanisation grew from 27.81 per cent to 31.16 per cent. Rural youth are migrating to cities in search of employment due to lack of opportunities back home and the undependable fortunes of monsoon-reliant agriculture. According to industry analysts, the 370-million urban population is expected to double within a decade, calling for an investment of over $1 trillion.

Growing urbanisation is creating a shortage of housing, land, and even basic necessities such as water, food and power. The housing shortage stands at about 18 million in urban India in 2012, according to a report released by the Ministry of Housing. The rising demand-supply gap will lead to rise in housing prices. Additionally, the housing shortage is largely prevalent among the economically weaker sections and lower-income groups.

Set 'green' standards for homes

Orange County 2 is a residential project at Pashan, Pune, comprising 36 flats that are self-sufficient in electricity, water, sewage and garbage processing needs. According to ocfoundation.in:

The project utilises only 18 per cent of the available 630 KVA of electricity through the use of hybrid power comprising solar and wind energy.

It saves energy by using a Programmable Logic Control (PLC)-based solar water heating system.

It is built using eco-friendly material.

Its rooms are designed to be spacious, well-lit and airy.

It saves nearly 26,000 units of energy.

It pays 10-15 per cent lower property tax.

It has reduced carbon emissions.

The Marigold Society is recharging groundwater levels with one lakh litres every day by purifying drain water. It has tested systems to convert this purified water into potable water.

Such green standards should be mandatory for all housing projects, and municipal corporations should ensure compliance before approving building plans.

Published on October 14, 2012
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