- The Indian citizens largely constituting the middle and lower middle class also form the majority of the population is indisputable. And the majority of the people in this segment also aspire to own a house is a common phenomenon too that gets ingrained in most of us while we grow up. All of us are brought up on a steady diet of the virtues of roti, kapda, aur makaan that only gets further concretized by dreaming about establishing self in the mostly class-minded society. How often have we heard about an often-repeated adage in society that roughly goes this way organizing marriage and building an own house is not only a gargantuan task but also leaves one drained out of every precious resource?
PC: Daniel Bortz
- The adage holds true even now despite the aspirational society having gained tremendous traction over the decades. The reasons are always the same in India, the bane of corruption. The less said the better about the perennially unholy nexus between the politicians-builders-officials lobby where corruption rules the roost at every turn affecting the common man. Mind you, the majority of the citizens would have invested lifetime savings and also made provisions to service the bank loans, which again garners a major part of income, to own a house. But the unscrupulous element at work always ensures the homebuyers anticipated pleasant experience of finally owning a house is spoiled owing to a variety of reasons, including long delays and substandard quality of workmanship.
- While the government authorities turn blind eyes to the problems, the last resort for the common man is to approach the judiciary for relief. Given the above, the recently undertaken controlled demolition of Supertech Twin Towers in Noida, NCR, was a media spectacle that cheered many. Understandably so because the Supertech case was a classic example of brazen violations that happen when local administration and builders run a joint venture of graft and rule-bending. However, it took the Supreme Court’s determination for these monuments of corruption to crumble to dust. Sadly, as good a role as SC played, and no matter how riveting the images of the demolition, there’s not much to cheer for India’s homebuyers.
PC: Sounak Mukhoapdhyay
- It’s worth reiterating that about 77% of the total assets of an average Indian household are held in real estate and it’s the biggest single investment most families make. This also makes them vulnerable to a peculiar feature of real estate – a disproportionate share of the risk is on homebuyers. Let’s look at the subvention model in vogue, a tripartite agreement between a builder, bank, and buyer. The buyer pays a part of the project cost upfront, the bank covers the residual cost, and the builder underwrites EMIs till possession is handed. There are many cases where builders default and banks chase the hapless buyer despite the agreement detailing the obligations of all sides. Yes, the courts do step in to protect buyers against coercive action by banks. But it is too little, too less as there are many cases awaiting relief.
- Reform measure like the Real Estate (Regulation and Development) Act represents the hopes of millions in addressing the malaise. Nonetheless, RERA cannot resolve the corruption at the level of urban bodies blighting the dreams of homebuyers. Further, it also suffers from the general weakness in state capacity as each state needs to establish a regulatory body. Agreed, RERA represents the best available solution today but requires state governments to invest in substantially enhancing capacity. Needless to mention, buyers will benefit from a fairer system, not a spectacle. Hope the authorities bandying the anti-corruption mantle step up in right earnest.