By: Sunil Dahiya, Sr Vice President, NAREDCO
India today needs global products and large scale regions to be developed which has to have inherent quality of having a good financial ecosystem, legal ecosystem, administrative ecosystem and the ecology of real estate has to function under the regulatory environment. But the regulatory environment should not be restrictive and instead focused to give impetus to the industry.
The regulator should not always only say ‘you should not do this, you should not do that’, but the regulator should also suggest better and viable ways and means. The problem is that we have so many regulators vying for the real estate sector. The time has come that we get a single regulator with all the power and the mandate to bring the right product to the consumers.
Ultimately, the consumers should not be bereft of the product. The business model of the developer can be good or bad, but the product delivery has to come to the investor. So, the Government or the regulator has to take the onus of delivering the final product to the consumers. If the business model of a developer is termed as bad and hence scrapped, then the product which he was likely to deliver is stuck in legalities and the consumers are left in the lurch.
Satyam has been a classic case where a Navratna company, in literal terms, when exposed with the financial irregularities, was handed over to the industry captains through auctioning and a final delivery was provided to all the stakeholders and the business was not allowed to fail.
So this kind of corporate governance model should be applicable in a regulatory environment, where it is the regulator’s onus to give the final product delivery. Every regulator’s orders state “in protection of the investor’s interest” but if the product doesn’t get delivered, where and how is it in the interest of the investor?
In the transformation stage, we have come to the point where the industry is at the threshold of large scalereforms. I would say one of the much needed reforms is the delivery of the product to the consumers. The Government should realise that policies have to revolve around the product. There should not be a gap in the policy which leads to non-delivery of the product to the consumers.
All the Government departments say “before this permission, you cannot do the sale”, “before this permission, you cannot give possessions”, but none of the permissions say “now you can do this”. There is legality around each corner and the policies are not seamless.
