Reforms at what cost and for whose benefit

By: Sunil Dahiya, Sr Vice President, NAREDCO

We are all talking about reforms in the Indian real estate. However, while a structural reform is the need of the hour, it is equally important to understand that efforts to regulate the sector by almost all possible players in the ring are actually detrimental for the overall growth of the sector. This also raises the fundamental question as to reforms at what cost and for whose benefit.

At the crossraods today, I would say with a great amount of conviction that the sector has to go a long way forward after some sound learning from the last two cycles of change. The process that started in 1995 was actually the evolution of the industry and before that it was the pre-evolution period.

India kick-started the process of policy reforms in the core sectors in ’95 and those reforms also gave a fillip to the real estate sector. Since ’95 the real estate sector has gone through the process of evolution and today we can vouchsafe that since 2005 we all have witnessed transformation.

While this transformation from 2005-11 has brought the real estate industry to the forefront of India’s GDP, it is also under constant monitoring and scrutiny. Though monitoring is a positive sign in itself, but to scuttle the development in the name of monitoring is definitely not desirable.

Any regulation should not be imposed to scuttle the progress. It should rather enhance the progress with new change to deliver better product, better price line and better positioning to the consumers. Certain other sectors have gone through such evolution and transformation, and the churn out has actually given better products and services to the consumers.

For instance, automobiles sector has come through the evolution and transformation and delivered better products & prices to the consumers. Telecom, banking, insurance, have all witnessed this in recent past.

So, real estate cannot stay far behind. Of course, real estate has constantly been upgrading products during the evolution and at the transformation stage. But now is the time to deliver products matching consumers’ expectation and global standards, and meet the customers’ expectations.