Haryana may form separate body for Gurgaon under RERA to look into homebuyers’ plaints

GURGAON: Keeping in view the large number of complaints of home buyers and issues related to developers from Gurgaon, state government is considering to form a separate or special body for millennium city under Real Estate (Regulation and Development) Act, 2016 (RERA) in Haryana for effective resolution of grievances related to real estate.

According to an estimate around 70% of total grievances related to real estate in Haryana are from Gurgaon only. “So it would be appropriate to have a separate and dedicated body under RERA for Gurgaon,” said a senior government official. This will save home buyers and developers from repeated travel to Chandigarh for resolution of issues related to real estate projects.

Two days back (on Tuesday) chief minister Manohar Lal Khattar during monthly district grievance committee meeting had announced that government will soon come up with its rule for implementation of RERA in Haryana. “During the meeting chief minister has also suggested a separate body for Gurgaon,” said the official adding that work on formulation of rules will start now and RERA is expected to be implemented in the state by April 2017.

Real Estate (Regulation and Development) Act, 2016, Real Estate Regulatory Authorities are required to be put in place by April 30, 2017 before full Act is brought into effect on May 1, 2017.

Elaborating about the reason behind consideration for separate body for Gurgaon, the official said chief minister had dedicating lots of time in resolution of home buyer’s issues from Gurgaon in last six months. Most of the issues listed in district grievance committee were related to developers.

Along with grievance meet, state government had constituted Allottees Grievance Redressal Forum (AGRF) in Gurgaon under the chairmanship of deputy commissioner in September 2015 for solving the problems of home buyers in private developer areas in a time-bound manner. Till now AGRF had hold four meetings in September 2015, January, August and September this year and took up more than 100 complaints in these meetings.

“The state government and chief minister in particular have been paying special attention for resolution of home buyer’s issues from Gurgaon. So it would be logical conclusion to form separate body under RERA dedicated for resolution of issues from Gurgaon,” said the official.

The move to form a separate body for monitoring the implementation of RERA in Gurgaon has been hailed by developers and buyers. “Given the size of the real estate market of Gurgaon, it is apt to have a dedicated RERA body to make the overall monitoring process efficient and speedy. As RERA is expected to bring greater transparency and accountability in the sector, having a separate body would further enhance the confidence of home buyer’s as well institutional investors in the Gurgaon real estate market,” said Vivek Singhal, president- Corporate Strategy, M3M Group.

Ravish Kapoor, director Elan, believes a separate body to ensure effective implementation of RERA in Gurgaon will have positive impact on the sector. “Most importantly, there is clarity needed on the law provisions and its applicability. With a local body in place, responsible developers will be benefited and will result into right implementation,” said Kapoor adding that in view of the current industry scenario and with RERA; the start is going to be little slow but eventually it will organize the sector and will set a transparent tone.

“Government has been paying attention to grievances of home buyers through district grievance meet and AGRF. Formation of separate body for Gurgaon under RERA would further help in resolution of home buyer’s issues,” said Satish Mishra, one of the home buyers of Unitech.

Construction equipment industry revenue to cross Rs 1.5 lakh crore

GURUGRAM: Builders Association of India President Avinash M. Patil on Wednesday said the Indian construction equipment revenues are expected to cross the $23 billion -- approximately Rs 1.5 lakh crore -- mark.

He said the increase in revenue would be fuelled by demand for construction equipment with the infrastructure investment set to go up.

Patil was speaking at the four-day BAUMA CONEXPO INDIA -- an international trade fair for construction machinery, building material machines, mining machines and construction vehicle industry organised here from December 12-15.

Besides Indian companies, around three dozen countries including China, Italy, Spain, the US and Germany are participating in the trade fair.

"The trade fair is also supported by associations like the Builders' Association of India (BAI), the Indian Construction Equipment Manufacturers' Association (ICEMA), the Construction Industry Development Council (CIDC) and Invest India," he said.

Source: ET Realty

Haryana to formulate rules under RERA, establish regulatory authority soon

GURUGRAM: Haryana government will soon come up with its rule for implementation of the Real Estate (Regulation and Development) Act, 2016 (RERA) for resolution of issues related to home buyers and developers, said chief minister Manohar Lal Khattar here on Tuesday after monthly district grievance committee meeting.

The CM promised to establish real estate regulatory authority but failed short of giving timeline for the implementation. Home buyers have been demanding for long the implementation of regulatory authority to put a check on developers and ensure fair deal to home buyers.

The move has come in the view of union government's final notification of rules on November 1 for implementation of Real Estate (Regulation and Development) Act, 2016 (RERA) that aims to bring transparency and set accountability in the sector and help in completion of stalled projects.

The ministry of urban development is working on similar rules which would be applicable for the National Capital Region of Delhi, while state governments and other Union territories with legislature will either come out with their own rules or have the option to adopt the union government notified rules.

Real Estate (Regulation and Development) Act, 2016, Real Estate Regulatory Authorities are required to be put in place by April 30, 2017 before full Act is brought into effect on May 1, 2017.

“Haryana will formulate its own rules under the act,” said a senior government official. Developers have been lobbying with the government to leave the on-going project out of the preview of the act in Haryana. State government like Gujarat and UP has decided not to include on-going project under the regulatory authority.

The implementation of the act is likely to provide relief to large number of home buyers affected by the delay in completion of their project. Developers will have to compensate the home buyers for delay in delivery of houses. Besides, builders will have to make public the details such as original sanctioned plans of the on-going projects with specifications and changes made later, total amount collected from allottees, money used, original timeline for completion and the time period within which the developer undertakes to complete the project, duly certified by an engineer, architect or practicing chartered accountant.

Meanwhile, the Haryana CM took up total of 22 issues related to home buyers during the grievance meet. After hearing the cases related to cooperative societies, Khattar directed deputy commissioner to prepare a list of all cooperative groups housing societies in Gurgaon and put details online. “We will hold a special meeting to resolve issues related to all cooperative societies together,” said CM.

While hearing an issue related to Shanti Niketan Group Housing society CM directed to file FIR against the officials of the society. Complainant had alleged that officials of society cheated member and collected money from them. They alleged the number of available flats were less than the total members.

Source : ET Realty

Top 10 policy initiatives that have impacted the real estate sector in India

The real estate sector was in the news all through the year, with the government announcing several major policy initiatives such as the passage of the Real Estate (Regulation and Development) Act 2016 and the amendment to the Benami Transactions Act. But the most talked about was the demonetisation of Rs 500 and Rs 1000 currency notes used mostly for real estate transactions.

Some policy initiatives listed by international property consultants Colliers Research included the following 10 policy initiatives

1) Real Estate (Regulation and Development) Act, 2016: The Real Estate (Regulation and Development) Act, 2016 which came into force in March 2016 has laid down a regulatory framework which will change the way the real estate sector operates in India. It aims to enhance transparency, bring greater accountability in the realty sector and set disclosure norms to protect the interest of all stakeholders. Speedy execution of property disputes will also be ensured in due course .

2) Amendment to the Benami Transactions Act: The Benami Transactions (Prohibition) Amendment Act, 2016 lays down stringent rules and penalties associated with dealings related to ‘benami’ transactions. It establishes a regulatory mechanism to deal with disputes arising from such transactions and levying penalties to increase the institution-investor participation and regulating the sector to make India an attractive investment destination.

3)100% deduction in profits for affordable housing construction: To promote affordable housing, the finance minister proposed 100% deduction in profits to an undertaking from a housing project for flats of up to 30 sq metre in four metro cities and 60 sq metre in other cities. These projects have to be approved during June 2016 to March 2019. Another condition was that the project should be completed within three years of grant of approval.

4) Interest subsidy for first-time homebuyers: To stimulate housing demand from first- time home buyers, the Union Budget 2016-17 also proposed deduction of additional interest of Rs 50,000 per annum for first-time home buyers for loans of up to Rs 35 lakh sanctioned during the next financial year for houses with a value not exceeding Rs 50 lakh. This move should positively influence home sales in non-metros in the long term where residential product prices are not as high as those in metros.

5) Change in arbitration norms for construction companies: To help the ailing construction sector, the government has cleared reforms including speedier resolution of disputes and the release of 75% of amounts that are stuck in arbitration. The government will now release 75% of amounts against margin-free guarantee in cases where arbitral awards have been given but have been contested. The amount released will be used by contractors to complete projects or pay off debts. This is aimed at improving the cash flow position of large developers who have significant exposure in infrastructure and government contracts and eventually help in speedy execution of large infrastructure projects. Coming at a time when most developers are struggling with liquidity issues, this is a boon from an overall perspective..

6) Service tax exemption on construction of affordable housing: Exemption of service tax on construction of affordable houses of up to 60 square metre under any scheme of the Central or state government including public private participation or PPP schemes will propel construction in affordable segment across India and encourage greater collaboration between the public and private sector as well as participation in affordable home construction.

7) DDT exemption for SPVs to REITs: The Union Budget 2016-17 exempted any distribution made out of the income of the Special Purpose Vehicles (SPVs) to the Real Estate Investment Trusts (REIT) and Infrastructure Investment Trusts (InvIT) from the levy of Dividend Distribution Tax. This paved the way for the REIT model to become financially viable for retail investors.

8) Implementation of Goods and Services Tax structure: Goods and Services Tax (GST) is a positive move towards simplification of Indian tax system. However, the real estate industry is still awaiting clarity on which items fall into “sin” and “common use” and whether they will attract 18%, or 12% possible tax rates. Additional clarification is also needed if the implementation of GST will subsume existing service tax and Value Added Tax (VAT), which are levied for under construction projects currently.

9) Currency demonetisation of 500 and 1,000 rupee notes: The recent demonetisation of Rs 500 and Rs 1,000 rupee notes by the prime minister is perceived as a significant reform. In the long run, this measure along with Real Estate (Regulation and Development) Act, 2016 (RERA) will align the real estate sector to the international standards of doing business, resulting in more fund flow from institutional investors, banks and higher unit sales.

10) Permanent Residency Status for foreign investors: The Union Cabinet approved the grant of Permanent Residency Status (PRS) to foreign investors, subject to various conditions and with a provision for renewal for another 10 years. As PRS allows the holders’ spouse/dependents to take up employment in India, as well as the purchase of one residential property for end-use, the end user pool, mainly for high-end and luxury segment products stands increased which can promote the asset class in a big way.

Source : Hindustan Times 

GST Council meet inconclusive; April 1 target seems undoable

NEW DELHI: With the Centre and states again failing on Sunday to sort out contentious issue of dual control of assessees, the Goods and Services Tax (GST) rollout from April 1 next year is now looking virtually impossible.

The 6th meeting of the all-powerful GST Council was slated to decide on dual control of assesses but the two-day meeting was curtailed to half and even on Sunday that issue couldn't be discussed because all the time was lost in going clause by clause of the voluminous draft legislations.

While Finance Minister Arun Jaitley did not categorically said that the April 1 target date would be missed, states like Kerala and Tamil Nadu said that meeting the deadline was not possible and GST could be rolled out from September.

"In the draft legislation there are about 195 sections. So it is the core bill of the legislation. We discussed 99 sections and a few clauses need to be redrafted. We would change that during the course of time. Hopefully, in the next meeting we would be able to clear the legislation part," Jaitley said.
 

The next meeting of the GST Council is scheduled for December 22-23.

Kerala FM Thomas Isaac said demonetisation has eroded states trust. "April 1 deadline is out of picture, GST can be rolled out only by September".

Source : ET Realty

Government nod to revised pay for Huda staff

CHANDIGARH: The Haryana government has given approval to implement the revised pay scales for Haryana Urban Development Authority (Huda) employees on the pattern of the state government from January 1, 2016. A Huda spokesman said the authority follows government pay scales. The government had already implemented the recommendations of the Central 7th Pay Commission for its employees, hence the authority has also decided to implement the same.

He said arrears of the revised pay would be paid in cash, preferably during the current financial year. The interim relief of Rs2,000 per month paid to group C and D employees would be discontinued, and the same paid from January 1, 2016 onwards would be recovered.

Source : ET Realty

RBI may cut rates by up to 50 bps next year: Report

NEW DELHI: The rate cut cycle may not be over, and the Reserve Bank of India may go for a 25-50 bps cut in 2017, as the underlying disinflationary forces are expected to continue next year, says a report.

RBI surprised with a status quo on policy, premised on upside risk to January-March quarter inflation and limited transient growth drag owing to demonetisation.
According to Kotak Institutional Equities, "The tone was hawkish and we do not rule out another status quo in February, albeit contingent on the CSO advance estimate of FY2017 GVA".
If the CSO's advance estimates of GVA indicate a significant slippage in third quarter (October-December) of FY2016-17 growth compared to RBI's estimate, "RBI may favour a cut in February", the report said.
On December 7, RBI kept interest rate unchanged despite calls for lowering it while it slashed the economic growth projection by half a per cent to 7.1 in the first policy review post demonetisation.
Even as RBI sharply lowered its real GVA forecast for FY2017 by 50 bps to 7.1 per cent, it noted that the revision is largely owing to the downside surprise in the second quarter of FY2016-17.
As per RBI's assessment, the negative impact of demonetisation on growth would be to the tune of around 15 bps and is likely be transitory.
However, according to Kotak Institutional Equities' assessment, based on estimated sectoral cash dependency, the impact on growth is likely to be "much higher".
"While we do see medium-term economic gains, short-term disruption could slow FY2017 real GVA growth at 6.4 per cent," the report said.
On prices, the report said that while the January-March inflation target of 5 per cent being comfortably met, inflation is likely to inch lower as we go into FY2018 (averaging around 4.2-4.3 per cent).
This should keep RBI's stance accommodative, with case for further 25-50 bps cut possible in CY2017.
The next monetary policy meet is on February 8.

Source : ET Realty