The Select Committee of the Rajya Sabha has accepted almost all amendments made by the Narendra Modi Cabinet to the Real Estate (Regulation and Development) Bill, which was originally drafted by the UPA government.
The amendments are largely the industry’s demands and pro-buyer measures. They will also help the government realise its vision of ‘Housing for all by 2022.’
While expressing satisfaction at the way the Panel headed by veteran BJP MP Anil Madhav Dawe worked, the Opposition, however, moved dissent notes to the report, which will be tabled in the Upper House on Thursday.
The Bill, drafted by the UPA, had mandated that 70 per cent of the amount collected from buyers needed to be kept in an escrow account to be used only for construction of a particular project. The panel, however, has stuck to the NDA government’s draft Bill, which has brought this down to 50 per cent.
Citing that in some cases the land accounts for nearly 80 per cent of the cost of the project, the panel maintained that keeping 50 per cent or more in a separate account will unnecessarily block funds. “Further, there is also a vast difference in the per square metre selling cost and construction cost of projects in some areas,” the report noted.
Moreover, it has suggested further flexibility in the clause by adding provisions to allow the promoter to withdraw funds from the separate account to cover the cost of construction in proportion to the percentage of completion of the project.
It also suggested that the amounts from the separate account shall only be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant that the withdrawal is in proportion to the percentage of completion.
The Opposition has argued that the clause that the Bill is applicable to projects on a minimum of 1,000 sq m of land will help large developers.
It wanted constructions in smaller areas brought under the ambit of the Bill as well. The Opposition also demanded addition of an anti-discrimination clause in the Bill to ensure buyers are treated equally and not kept from purchasing property on the basis of religion, caste, gender or eating habits.
The parliamentary panel also recommended that the promoter should bear all the liabilities till the flat is transferred to the allottee’s name.