If Indian real estate sector wants to attract foreign capital to become globally competent,it will have to become more transparent.
The real estate sector is facing a tough time.On the one hand,a slowdown of the economy has cast a shadow on the demand for houses and office space.The problem has only been compounded by a lack of transparency and good regulations in the sector.
On the other hand,the disputes in land acquisition by the Greater Noida authority has further eroded the credibility of developers in the eyes of buyers and investors,despite the fact that they were hardly at fault,as they bought the land from the government authority.
It is very evident that more governance and regularization is called for, says Anuj Puri,chairman and country head of Jones Lang LaSalle India.Puri argues for a uniform regulation all over the country to regulate the sector,as it is being done in the case of corporate sector.
He says: There are arguments against stronger,more centralized regulation,the premise of which seems to be that diversity of the country,the fragmented political structure and the control of different states by different political factions call for localised rather than centralized governance.A single unifying body would,it is claimed,not serve the purpose.
However,he opposes this saying that it is necessary to create a focal point of governance.In the corporate sector,tried-andtested best practices in governance are already being applied in India.It is time to bring Indian real estate up to those standards, Despite the numerous players involved at all levels,many of our services industries are already well regulated.The sector needs to be able to present itself as credible and trustworthy enough to warrant the considerable foreign funds,waiting in the wings,but which will flow in only once greater transparency can be had in the market,Puri says.The ultimate goal of the sector is and must be a cleaner,more transparent and more attractive real estate market place.
Even the real estate players are supporting the idea of a better regulation,so that transparency could be brought in the sector.Anil Sharma,the CMD of Amrapali,says that a better regulated environment in the sector will give its players credibility,which is very important to run business profitably.
In fact,Sanjay Dutt, CEO of JLL India, says that scams and corruption have not only marred the reputation but also,to a certain extent,affected profitability in the sector.If Indian real estate sector wants to attract foreign capital to become globally competitive,it will have to become more transparent.
The government is trying to increase transparency in the sector for which it has proposed a Model Real Estate Bill.It proposes to establish a regulatory authority and appellate tribunal to regulate,control and promote real estate construction,keeping in view the interest of the buyer and enable smooth and speedy construction.
