The land acquisition Bill could be the political nemesis of the Modi government. To be sure, the junking of social impact assessment and mandatory consent from 80% of those whose lands were sought to be taken over for five prescribed public interest projects has a rationale—to expedite development and growth on which hinge additional employment opportunities. Where it went wrong was in alienating farmers with opposition going to town with accusations that farmers’ interests are sought to be made subservient to those of industrialists.
If land acquisition ordinance makes drastic changes on these two counts to the law made by the UPA government, the one proposed now seeks to make a small but significant change to the law in the anvil initiated by the same UPA government---Real Estate (Regulation and Development) Bill, 2013. The original bill wanted to safeguard the interests of buyers of residential houses. Now the scope of the bill is sought to be enlarged to incorporate commercial properties as well.
Reuters
When mutual funds made their advent in India, one thought it would serve the small investors. But very soon they degenerated as the handmaiden of big investors for tax and other reasons. Likewise Real Estate Development Authority (Authority) could well be hijacked by deep-pocketed commercial property buyers in keeping with the national trend. The Authority is supposed to serve both home buyers and buyers of commercial properties but given the resources constraints invariably plaguing all institutions in the country, its services will be more fully tapped by buyers of commercial properties, endowed as they are with greater resources and organized as they are better with tremendous lobbying power. Their corrupting influence too cannot be undermined in their race for hogging the Authority’s services. Opposition parties are once again going to tap into the deep discontent already building up---Modi government cares more for commercial interests than household interests. The amendment made to the Real estate bill is therefore untimely.
What needed to be done was to make the Real Estate bill foolproof. For example, the Bill doesn’t make any attempt to minimize the pernicious role of black money, rampant in real estate transactions, with even builders winking at offers of cash, secure in the knowledge that such cash would come handy in greasing palms and buying stones etc from quarry owners who have a strong dislike for the banking channel.
The Bill should therefore have put the onus on the builder and said no cash should be accepted as receipt from buyers. Secondly, its centerpiece is the website to be put up by every registered builder on the Authority’s portal. This presupposes all buyers are net savvy and computer literate. In addition to the accent on website, the Bill should have provided for making available all the information put up on the website on paper as well at no additional costs to the buyer.
Lastly, it is all fine to make the builder accountable and pay compensation for defects, delays etc but then often defects and delays are contributory. To wit, the builder might have promised running water and sewerage lines to the buyers but he in turn is dependent on the local municipality for these facilities so much so that in all fairness he alone should not be made liable for deficiency in these services.
Of course any leeway shown to him would be seized with alacrity given the buck-passing tendencies in our country. But nevertheless the local municipality ought to have been brought under the jurisdiction of the real estate authority so as to make his writ run meaningfully.
Cooperative societies have been bracketed with builders. In case of any deficiency irate members may pounce on their managing committees instead of going for the jugular of the real builders. The income-tax law spares cooperative societies from both the tax on income from house property as well as on capital gains because the societies are only the nominal owners with the beneficial ownership resting with the members. The Bill too should have protected the societies by exhorting members to proceed against the builder. Of course cooperative societies can take up cudgels for their members voluntarily but it would be wrong to position them directly in the line of attack.
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