The corporate rating agency ICRA recently disclosed the fact that RERA is not a well-balanced act in order to benefit the builders. ICRA also puts light on the fact that RERA is chiefly focusing on the buyers’ and investors’ takings. Builders too have certain issues like multiplicity of approvals, lack of ample funding opportunities. Leaving out these issues RERA concentrates on timely and orderly delivery of the projects and the truthfulness of the offerings. Developers as well need some assistance from the authority on speeding-up and well-execution of the entire construction process. According to ICRA the project execution cycle lined up between 3-4 years, has expanded to as much as 6-7 years.
The vice president, corporate sector ratings, ICRA Ltd. Mr. Shubham Jain said, “The provisions of Act hold significant importance for buyers and investors, but problems faced by developers, including multiplicity of approvals and lack of adequate funding avenues, continue to remain unaddressed in the Act.’’ Nevertheless ICRA also highlighted the positive profits of RERA regulation which comprises an ultimate exclusion of deceitful developers and brokers, advanced standardization, enhanced liability for well-timed implementation and also proper use of investment coming from the various avenues.
Speaking about the commercial real estate sector some positive growth in this sector is seen during the past one year or so. On the other hand residential real estate sector is still soundless in spite of ever-increasing market demand. Besides there is no commendable price slash in recent times which develops a negation in buyers’ attitude. This is not at all a favorable situation for residential real estate market as well as entire national financial market. Under this circumstances a sluggish attitude has been observed in the supply chain, for builders have been facing challenges like- delays in receipt of approvals, scantiness in manpower and effective capital funds.
“The opaque nature of the industry coupled with the lack of regulatory bodies thus far has resulted in significant asymmetry of information as well as skewed balance of power between the developers and the buyers,” said Mr. Jain. The Real Estate Regulatory Bill, 2016, which intended to standardize the housing sector and look after consumer welfare, was passed by Rajya Sabha on March 10 and by Lok Sabha on March 15. ICRA also feels the recent consumer activism coupled with the aggressive deportment by the judiciary is a constructive step towards keeping up transparency on accountability and timely deliverance and favoring buyers’ investment.