Changes in the Real Estate Sector in India: A Case Study
Mahesh Sarva1, Nitin Gupta2, Praveen Dube3

1Dr. Mahesh Sarva, Mittal School of Business, Lovely Professional University, (Punjab), India.
2Dr. Nitin Gupta, Mittal School of Business, Lovely Professional University, (Punjab), India.
3Dr. Praveen Dube, Faculty of Management Studies, DIT University, Dehradun (Uttarakhand), India.
Manuscript received on 26 March 2019 | Revised Manuscript received on 05 April 2019 | Manuscript Published on 27 April 2019 | PP: 694-697 | Volume-7 Issue-6S2 April 2019 | Retrieval Number: F11160476S219/2019©BEIESP
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Abstract: The objective of financial sector reforms is to increase the efficiency and effectiveness of the financial system. To mobilize saving effectively and channelize such saving efficiently to most deserving sector, suitable strategies had to be developed. The objective of real estate sector reforms was to bring transparency and confidence in the sector. The RERA Act 2016 was passed and came into force on May 1, 2016, has given the Indian real estate industry first regulator. It aimed to bring fair and equitable transaction between buyer and seller, making transaction accountable and transparent. I as a developer and real estate agent in the small city of north India thought that lot of work needs to be done in order to register all projects to authority thus impact the way of doing business in the sector. In the meantime, benami property amendment act 2016 came into force from November 2016, which is a step to reduce corruption in India. Then came one fine night when as an owner of the real estate company I was sitting in my office and closing one deal. Suddenly the Indian Government banned currency notes of Rs. 500 and Rs.1000 on national television. As a developer, I sensed that it will impact the real estate market as it nullified 86% of the country’s banknotes. On the first note, I assumed it will bring down the property prices as home buyers generally pay 30 to 40 percent value in cash to avoid tax. As a last piece of change came the Goods and Services Tax Act, 2017 which disturbed real estate transactions further. In the year 2018 real estate sector’s unsold units and delayed projects have given the indication that the slowness in real estate will linger in the future also. Beyond the data, there are many stories of distress where investor’s money stuck in delayed projects. After all these changes in the sector, as a developer, I thought how external factors changed the way of doing business and the participants had to understand the changing dynamics to survive in the sector.
Keywords: RERA Act, Reform, Demonetization, GST.
Scope of the Article: Real-Time Information Systems