According to the World Bank’s Ease of Doing Business ranking 2018, India’s rank with regard to property registration has gone down from 138 to 154 as full impact of RERA not yet visible in the ranking
India's 30-place jump in the World Bank's Ease of Doing Business ranking to 100 has come in as a relief, especially for a government that has been facing criticism over demonetisation introduced last year around this time, GST reforms and a general slowdown in the economy.
However, according to the World Bank, though India’s ranking in dealing with construction permits improved by four positions to 181 (out of 190), the country’s rank with regard to property registration has gone down from 138 to 154 due to increase in number of procedures, time and cost.
This is also because the full impact of RERA is still not visible in the ranking for property registrations This will only happen when all states have adopted RERA without tampering with the Central guidelines by next year.
Even in case of getting an electricity connection, India was ranked 29 out of 190 this year, which was a drop by three positions from last year’s ranking.
There is no doubt that this is India’s best performance ever but much more needs to be done for the country to break into the top 50 slot. Real estate experts say that there needs to be a sharper focus on online record of titles, title insurance, simpler land acquisition processes as the country heads towards achieving the target of 1.2 crore houses for all by 2022, single window clearances, online registration facilities, insolvency and contract enforcement. RERA too needs to be implemented across all states with little or no dilution.
Registration of properties needs to be made simpler and should be done online, say experts. Steps need to be taken to introduce single window clearance system for construction permits, setting up commercial courts and benches for fast tracking contract enforcement.
“The momentous recognition of India breaking into top 100 in World Bank’s Ease of Doing Business ranking is a testimony to our government’s progressive policy reforms. India is poised as the biggest improver among all countries on the back of big gains on a number of measures taken by the present government. This endorsement will certainly put us in a favourable spot on the global business map and foreign investors will continue to prefer India to establish their businesses as our economy becomes more attractive. Having said that steps need to be in place for ease of registering properties. Online registration needs to be fast-tracked. Businesses need to acquire properties and have comfort with regard to land acquisition. Without digitization, there is unlikely to be ease of business. Digitisation of land and getting clear title a must. Largest number of legal disputes are on account of land,” says Anshuman Magazine, chairman, India and South East Asia, CBRE said.
Experts also feel that since only Delhi and Mumbai have been considered for this ranking, a large section of micro-entrepreneurs who comprise the bulk of India’s largest informal sector have been kept out of its purview. More states need to come on board for a realistic assessment of these parameters. It must be noted that the number of procedures involved in applying for a construction permit in Delhi were around 24 and 37 in case of Mumbai and that it took 157.5 days to get a construction permit in India and 128.5 days in Mumbai.
Shubhranshu Pani, Managing Director - Strategic Consulting, Infrastructure & Smart Cities, JLL India, points out that prior to RERA becoming a market force in 2017, information on projects, land title clearance deeds and developer liability existed somewhere on paper (if existed at all) and buyers had no access to it. Nevertheless, verifying land title clearances and other aspects of due diligence were the responsibility of the buyer, who would have to engage a consultant for such verification.
“The full impact of RERA is still not visible in the ranking for property registrations This will only happen when all states have adopted RERA without tampering with the Central guidelines by next year. Also, initiatives such as single-window clearances and online registration facilities should be strengthened in order to make these procedures less time-consuming and cost-intensive,” he says.
RERA as a body that resolves disputes between developers and buyers is a progressive initiative, which however must be implemented in all markets without dilution. Progress on this will be captured in next year’s report and reflect in India’s ranking on this parameter. The processes involved in resolving disputes between businesses, land owners, developers and the Government need to be speeded up – a clear action point for the coming year. There is also talk of commercial courts being set up, experts say.Online records of titles, title insurance and title search and certification will be the real game-changers which could take India into the World Bank’s Top 50 almost immediately. Work has commenced on digital registration, digital records and online search and certification, but adequate controls also need to be added at every stage, they add.