NCLT failing homebuyers? Manohar Lal slams stalled project system, calls for real estate cleanup

The focus now, he added, is on ensuring last-mile connectivity so commuters can fully benefit from the expanding system.

Union Housing and Urban Affairs Minister Manohar Lal on Saturday openly criticised the National Company Law Tribunal (NCLT) for failing to resolve cases of stalled real estate projects.

Speaking at the annual convention of the realtors’ body NAREDCO, the minister said NCLT was envisaged to revive projects and protect consumers, but instead, it has become a graveyard for unfinished housing schemes.

“Projects that could otherwise have been saved are never completed once they go to NCLT. The system has not delivered what it was supposed to,” he remarked, adding that he was raising this concern with the consent of the Prime Minister.

A presentation on reforms, prepared with the Corporate Affairs Ministry, is now set to be placed before the PM, he said.

Cash dealings, misleading ads under spotlight

Beyond the tribunal issue, the minister also pulled up developers on cash transactions in property deals, warning that the government is working to eliminate them.

“Cash dealing is a big problem in the real estate sector,” he said, urging builders to align circle rates with market rates to reduce cash usage.

He also directed the industry to steer clear of misleading advertisements, stressing that transparency in marketing is critical for building trust with homebuyers.

RERA improved consumer protection, but gaps remain

Manohar Lal noted that the introduction of RERA (Real Estate Regulatory Authority) in 2017 has significantly reduced disputes between builders and consumers.

However, he admitted that there are still instances of fund diversion from escrow accounts meant for construction, leaving projects stuck despite regulation.

“This is unacceptable. If we want to raise the sector’s credibility, strict adherence to RERA norms is essential,” he cautioned.

Push for faster approvals, state-level best practices

Delays in project approvals remain another drag on growth. The minister asked NAREDCO to press state governments for ease of doing business and faster clearances, highlighting that best practices adopted by some states should be replicated nationwide.

Citing his tenure as Haryana Chief Minister, he said his government introduced single window clearances and special schemes for stalled projects during the COVID-19 pandemic, which helped revive activity.

Real estate’s role in India’s growth story

Calling the real estate sector a pillar of India’s progress, Manohar Lal underlined that it already contributes 8-10 percent to GDP, but must aim to reach 18 percent by 2047.

India’s economy, he said, is expanding rapidly under PM Modi’s leadership, registering 7.8 percent growth in April-June 2025 despite global headwinds and the recent 50 percent US tariff shock.

“The high growth silences countries that doubt India’s potential,” he declared.

Metro expansion puts India on global map

The minister also highlighted India’s infrastructure progress, particularly in metro rail, where the country is ranked third globally with 1,036 km of operational lines.

With another 900 km under construction, he said India will soon surpass the United States to become the second largest metro network in the world.

The focus now, he added, is on ensuring last-mile connectivity so commuters can fully benefit from the expanding system.