The decision taken by the Indian Government to relax the rules in the construction sector, presumably to bring in more FDI into the cash-starved sector, is at best a ploy to tinker with policy framework, which may not yield the desired result. By reducing the threshold of minimum amount of FDI, minimum floor area and other cosmetic changes will not suffice the purpose.
The reasons are not far too seek. Our construction sector including the road building is steeped in an opaque framework. Even the so called big builders are known for hiding facts from the buyers and the authorities, not to speak about the rampant scams and corruption charges leveled against the builders. No builder hands over the flats to the needy buyers in time. Sometimes, the delays are so long that the buyers have to wait for years together. Sometimes, the schemes are caught in lengthy court cases. There are occasions when the builder goes missing after collecting the money. The government agency Delhi Development Authority has not handed over promised plots to 25,000 people even after a lapse of 34 years and that too despite the directions of various courts including the Supreme Court of India
One need not have to go far searching for examples. How many housing societies in Delhi and NCR region are struck on account of these reasons. For instance, there are several dozens of societies in Dwraka which are still unoccupied on account of the court cases or lack of approval from DDA or other regulatory bodies.
In places like NOIDA, Greater Noida, Gurgaon, Sohna etc. advertisements are coming up every day inviting the public to invest in flats and other properties. The general public is scared of doing that because of the preponderance of bitter experiences, which are in the public domain.
The government should clean up the system on an urgent basis. For this, the first thing to be made is setting up a strong regulatory body, which can evolve building bye-laws and implement them without looking into the parties involved in it.
Two, the regulatory body should be given powers to redress the grievances and take actions against erring parties.
Three, consider imposing hefty penalties on the erring parties immediately rather than allowing the case to be drifted in the lengthy court procedures.
Four, impose a penalty clause on all construction activities in case the builder or contractor fails to deliver it in time. This money should go directly to the buyer or buyers' organizations for common upkeep.
Fifthly, create a standard and uniform rules and regulations for all states.
The botttom line is that if the government is wanting to bring more FDI in the construction, town ship building or creation of smart cities, mere rhetoric will not help. We have to have credible structures to ensure transparency and fairness to the stakeholders. Enactment of foreclosure laws has protected the interest of the builders and lending agencies , against defaulting buyers . Should we have a similar law to protect the buyers as well, enacted and implemented.
That will signal the faith of the people in the system and will create an atmosphere for channelizing FDI into the country. Otherwise, the much touted housing for all will remain as a pipe dream.
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