Real Estate Regulatory Bill may become breeding ground of corruption: CREDAI

Stating that the Real Estate Regulatory Bill approved by the Union Cabinet seeks to whip only errant developers, realtors apex body CREDAI Chairman Lalit Kumar Jain has expressed fear that it could encourage corruption instead of curtailing the social menace.

Mr Jain expressed his views on the subject based on the press release from the Union Cabinet and added that he would provide detailed observation after receiving the draft legislation.

Mr Jain, who is also the Chairman and Managing Director of Mumbai-Pune developer Kumar Urban Development Limited (KUL), said the real estate sector definitely needs a regulator on the lines of the one controlling telecom, banking, stock markets and insurance sectors.

He lauded the intent of the Housing Minister but said that the discretionary powers for registering or deregistering projects and adjudication by a bureaucrat could become breeding grounds for corruption. Moreover, the provision for criminal prosecution of developers could lead to the exit of professional and qualified developers.

"Our fear is that those with expertise to handle political influencers will only survive, thus leaving the all important industry in the hands of corrupt people," Mr. Jain said and called for regulator covering all stakeholders like defaulting customers, the approving authorities and financial institutions that fund projects.

"How can anyone blame the developer if a project is held up due to approval delays or funds for that matter?" he asked.

"CREDAI has worked hard to advise the ministry to come out with appropriate comprehensive Bill with teeth to direct all stakeholders including approving authorities which will protect consumers while enhancing quality environment for the business," he pointed out. Otherwise it will be an added establishment with huge costs, serving no purpose other than adding cost, thereby making tenements costlier.