Gauging the economic mood

The Real Estate (Regulation and Development) Act, 2016, RERA, came into force on May 1, 2017. The situation up until now suggests that various state governments have been busy diluting the Act. This isn't surprising, given that at the state level, there is a huge nexus between builders and politicians. In fact, the situation in some states has reached a stage where builders are politicians and politicians are builders. Given that RERA hits state-level politicians where it hurts the most, they want to limit the damage it can cause. Nevertheless, this point has been extensively analysed in the media. Hence, in this column I would like to analyse a totally different point. One impact of RERA will be that every commercial as well as residential real-estate project needs to be compulsorily registered with the real-estate regulator of the state the project is being built in. Up until now, a builder wanting to start a project could have just advertised about the project in a newspaper or on the local FM radio and started it, irrespective of the fact whether the permissions to build the project from the government agencies were in place or not. It was as easy as that. Also, 70 per cent of the amount collected for the project by the builder needs to be maint

This article was originally published on August 11, 2017.