Budget 2014:Govt plans big changes in 2 Realty Bills

Two bills that would impact the country’s real estate are the Real Estate Regulatory Bill and the Land Acquisition Act. While both bills had been put forward during the previous government, the present government plans to make a few key changes in order to speed up important projects and give a boost to real estate.

Changes in Land Acquisition Act

The present government had already hinted of bringing about a few changes in the previously approved Land Acquisition Act, 2013. The Act was brought in by the previous government to redress issues related to rehabilitation and compensation of owners whose land was acquired for industrial and infrastructure purposes.

Many states were, however, dissatisfied with the new Act as it is said to be detrimental to the industry. As such, the present central government has sought suggestions from chief ministers from all the states in order to tweak the Land Acquisition Act. Many chief ministers have poured in their suggestions. The present government is planning to balance the interests of both landowners as well as the industry.

One of the key change would be adding more sectors to the section 40 of the Act. According to section 40, the government may acquire land on an urgent basis for purposes of national security and defence with a notice of just 30 days. This can be extended for purposes that may arise out of national calamity. Several state governments have suggested adding road building and PPP based power projects to be added in this section. There will, however, be no changes in the process of land acquisition or the compensation given to the landowners.

Changes in Real Estate Regulation Bill

In a move to regulate the real estate sector of the nation, the new Government has decided to pull up its socks by revising the Real Estate Bill, after putting heads together with all the stakeholders. The Real Estate (Regulation and Development) Bill, 2013, was introduced with the primary intention of safeguarding the interest of home-buyers and create a mechanism that will help to work out all kinds of real estate disputes.

The revised bill will aid the flagship program of the government ‘housing for all by 2022’, by taking into consideration a number of efficient financial models. As per industry experts, the bill will help the government to meet the housing shortage of 300 lakh houses in urban locations by 2022 end, by encouraging a new idea of establishing an escrow account, via which the revenue generated by increased housing activity, can be put to use in the same sector. Furthermore, the bill will also lay emphasis on public-private-partnership models and interest subvention to home buyers to meet the changing demographics of real estate in the country.