Realty sector needs more reforms to realise full potential

Landmark reforms like RERA and GST, as also demonetisation, have brought about much-needed transparency in transactions, helping the real estate sector to free itself of fraud, malpractices and other problems faced by consumers and investors. Yet, the sector needs more reforms to break free of the various ills that still plague it in order to realise its full potential as a major contributor to the country's GDP. The reform-oriented Narendra Modi government, which is fine-tuning and reinforcing the reforms undertaken by it to increase their on-ground efficacy, has its task cut out to free real estate from high transaction costs, especially to achieve the success of its flagship mission of "Housing for All". Though the interest subsidy scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) has proved to be a big boost for first-time home buyers in the EWS, LIG and MIG category, yet high transaction costs are a deterrent to home ownership. Currently, GST, stamp duty and registration costs act as a dampener. There is an average stamp duty of six percent and it is not uniform and is much higher in some states. Further, in many cities, there is the anomaly of collector rates of property being higher than the market rates.