New Delhi:
The government lost a major round in parliament today over a crucial reform for the real estate sector in the Rajya Sabha where it is in a minority. Under pressure from a united opposition, the bill has been sent to a committee for review.
There are just days to go before this session of parliament ends, and the government has failed to push through crucial legislation for the Prime Minister's agenda of re-energizing the economy.
Congress Vice President Rahul Gandhi has declared the real estate bill as "pro-builders", alleging that it offers more protection to developers than to home buyers. Mr Gandhi's stand is seen as an attempt to woo the urban middle class away from its traditional support for the ruling BJP. At a meeting last week, Mr Gandhi met a delegation of home buyers and told them the Congress stands with the middle class "just as we stand by the farmers, tribals, and the labourers".
The bill for real estate was submitted in 2013 by the earlier Congress-led government, but failed to clear the Rajya Sabha. Mr Modi's cabinet has amended that proposal. The changes, Mr Gandhi says, have diluted the rights of home owners. The government says the new version will boost investor confidence, stamp out illegal practices, and curb undeclared black money which is often parked in property markets.
The new rules, applicable to residential and commercial developments, will make it mandatory for all projects and brokers to be registered with a real estate regulator who will oversee transactions and settle disputes.
During recent years, sluggish economic growth and delays in getting approvals have stalled several real estate projects, leaving buyers waiting for their homes and developers holding high debts.