New Delhi, Aug 30 (PTI) Union Housing and Urban Affairs Minister Manohar Lal on Saturday pointed out that the NCLT has not been able to deliver the desired result in case of stalled real estate projects and stressed the need to improve the system to protect the interest of consumers and banks.

Addressing the realtors' body NAREDCO's annual convention, he asked builders to avoid cash dealings in property transactions for proper growth of the real estate sector that contributes 8-10 per cent to India's GDP.

He also directed the real estate industry to avoid misleading advertisements while marketing their projects.

"Cash dealing is a big problem in the real estate sector," the minister said.

The minister said the government is making efforts to eliminate cash dealings in property transactions and asked the industry to do its part.

He also emphasised the need to align circle rates with market rates to discourage cash transactions.

The minister noted that fights between builders and consumers have reduced after the enactment of the real estate regulatory law, RERA, in 2017.

Although, he said, there has been some case of diversion of funds, which are kept in escrow accounts under RERA law, without doing construction works. The minister said he was aware of such cases and the people involved.

Referring to real estate cases under the National Company Law Tribunal (NCLT), Manohar Lal said the banks approach the tribunal in case of default by builders in repayment of their loans.

"Jitna system sudharna chahiye tha NCLT ke Karan se woh nahi sudhara. (NCLT has not been able to improve the system as it was envisaged)," the minister said.

If any project, which could otherwise have been saved, goes to the NCLT, it is certain that the project will never get completed, he said.

"This (NCLT) is a government system which I am criticising. I am doing this with the consent of the Prime Minister," he said.

The minister said a presentation has been prepared in consultation with the Corporate Affairs ministry, and the same would soon be presented before the Prime Minister. "We need to correct the system, and if we do it together, it will be better," he said.

Referring to delays in approvals for development of projects, he asked the NAREDCO to write to states government for ease of doing business and faster approval system.

Best practices of a state should be replicated by other states, he added.

He said the Haryana government, when he was the Chief Minister, adopted single window clearance and also launched schemes for stalled projects because of the COVID pandemic.

The minister noted that the real estate is very large and it has an important role in the country's progress. The real estate sector contributes 8-10 per cent to the country's GDP and stressed the need to increase its share to 18 per cent by 2047.

The country is growing at a fast pace under the leadership of Prime Minister Narendra Modi, he said.

He highlighted that the country's GDP growth stood at 7.8 per cent in the April-June quarter of this fiscal, despite concerns of adverse impact on growth because of a 50 per cent tariff imposed by the United States.

The high growth will silence those countries which have doubts about the growth potential of India, the minister asserted.

He said the infrastructure has improved a lot in the last 11 years of the Modi government.

Talking about metro rail expansion, the minister said India is ranked third globally in metro rail with 1,036 km operational.

He said the country will soon beat the US to become the second largest in the world, as around 900 km of metro rail is under construction.

He also spoke about providing last-mile connectivity to people travelling by the metro rail network. PTI MJH MR

Insolvency process reform urged to prevent stalled real estate projects remaining incomplete and protect consumers and creditors. NCLT has not delivered expected revival of stalled real estate projects, prompting calls for reform of insolvency processes to protect consumers and bank creditors. The minister urged measures to curb cash dealings, align circle rates with market values, prevent diversion of escrowed funds under the real estate regulatory regime, and strengthen oversight. Administrative reforms including single window clearances, faster approvals and replication of state best practices are recommended to prevent project distress and aid completion.