Changing dimensions of the Real Estate Sector: Central Government’s attempt to bring transparency into the system vis-à-vis Introduction of Real Estate (regulation and development) Act, 2016

Abstract

Ever since the liberalization of the Indian economy in the 1990s’, the Real Estate sector saw a large amount of investment in the domestic sector, coupled with an increase in the investment in the form of FDI when the Indian government in 2005 invited foreign investors in the sector. While the sector underwent a huge change, the system still remained opaque because of a lack of accountability in the sector due to it being vastly unregulated. Large inflows of money into the sector in addition to No centrally governed law, led to increased malpractices on the side of various Stakeholders, particularly the Promoters and the Agents. Uncertainty loomed large over the sector until 2016 when finally the Real Estate (regulation and development) Act, 2016 was passed by the Central Government. 

The research paper in toto aims to evaluate the impact, both legal as well as sociological, that the newly enacted statute has created in just a year of its inception. In order to reach a conclusion, the study has been divided into five parts. In the first part, the author will trace the history and need for the regulation of the sector by the way of an enactment along with the impact on various Stakeholders, particularly the Promoters, who have been the most affected party. The research will be focused on determining how the check on activities of the Promoter will instill a sense of optimism in the Buyer/Allottee. After that, the author will make the reader understand how this consumer-centric regulation will benefit from the optimism so gained in the form of increased Foreign Direct Investment. Also, a link would be established between the increased FDI and the successful implementation of the Pradhan Mantri Awas Yojana (PMAY) along with Urban Development. In the third stage, the study will be confined to elaborating how Affordable Housing and Homebuyer’s Protection are interlinked. Following which, the author argues that though the primary focus of implementation of RERA is to bring transparency but, it is directly or indirectly helping the government achieve its other agendas as well, the biggest beneficiary being the Housing for All by 2022 Plan. Therefore, it would be tried to establish how RERA is the means to an end; the end being much more than just bringing transparency into the real estate sector. In drawing things to a close, the author will give suggestions on what can be the possible shortcomings of RERA as a night watchman in the light of State Governments agitation to abide with the centre and how RERA has fared in what is its infancy.