‘Good governance’ is fast becoming a buzzword in the murky world of the country’s real estate. At a time when the realty sector is facing a credibility crisis, following its links with the 2G telecom scam, regulators, government, non-profit bodies and stakeholders are working on measures that might bring a semblance of order in the chaotic industry.
The National Housing Bank (NHB) and the Indian Banks Association (IBA), for instance, are learnt to have finalised guidelines for property valuation that can be used as yardstick for bank lending. Valuation of property is extremely disorganised in India and lacks uniformity of any kind, while it is a streamlined business the world over, points out a real estate expert.
Sachin Sandhir, managing director and country head (India), Royal Institution of Chartered Surveyors (RICS), told Business Standard that initially banks and financial institutions would use the property valuation guidelines as recommendation, but these might become mandatory for the industry over a period of time. The project is being carried out under the guidance of the Reserve Bank of India (RBI).
PSN Rao, chairman, National Association of Realtors, said a Valuers’ Bill had also been in the works for some time, and it would be a good idea to revive it. “Wrong valuation while mortgaging a property for loan has been a concern in the country for long,” Rao said.
In another step to cleanse the realty sector, the Royal Institute of Chartered Surveyors, a non-profit global professional body for the real estate sector started in the UK some 140 years ago, has been talking to the Securities and Exchange Board of India (Sebi) to introduce global standards for valuation of IPOs (intial public offers) in this industry. IPOs based on incorrect real estate business valuation must not continue, Sandhir pointed out.
Among some other global best practices that may come to India in near future are brokerage and property measurement standards.
Interestingly, the Confederation of Real Estate Developers of India (Credai) recently announced the ‘Vision Transparency’, with the aim to remove corruption from the sector, reduce administrative cost for the government and bring down the sale price of a tenement. Credai President Lalit Kumar Jain, said: “To ensure transparency, compliance and development standards, it is imperative that the government energise the process of approvals that currently constrains the system.”
Besides offering professional education and courses in real estate, RICS, which opened its India chapter 18 months earlier, is going all out on skill workshops and conferences on real estate. ‘Ignite Change’ is one such conference it would organise for builders in Singapore towards the end of this month, and Urban Development Minister Kamal Nath, among others, would attend the meet.
It may just throw up some answers for the realty sector, the country’s second-largest employer after agriculture.
Nivedita Mookerji
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