India’s Republic Day commemorates the enactment of the country’s Constitution on January 26, 1950. While the Indian Constitution is fundamentally important at all levels of Indians’ lives today, we should also remember that it has played a significant role in shaping the country’s housing market.
After all, it provides the framework for citizens and government’s rights and duties and lays out the principles and policies that guide the country’s development.
The Indian Constitution also provides several other rights and protections impacting the housing market. For example, it guarantees the right to life and personal liberty, which means citizens have the right to live in a safe and secure environment.
One major change in the Indian Constitution in 1978 significantly impacted the housing market, and this was the part that describes the Right of Property. Initially, this was a fundamental right under the Constitution, which meant that it was protected and could not be taken away without just compensation.
However, in 1978, the 44th Constitutional Amendment Act was passed, which removed the Right to Property as a fundamental right. One might think that this is actually negative for the Indian real estate market. In fact, the opposite is true.
This change allowed the government to enact laws for land acquisition and regulation of property transactions with greater ease. With this amendment, it was possible to fast pace housing construction. Without this policy change, most land would have remained in the hands of a few and large-scale developments would have been impossible.
The Indian Constitution also lays out the principles and policies that guide the country’s development. For example, it provides for the promotion of the welfare of weaker sections of society. The Constitution also provides for the promotion of economic growth and the reduction of inequality. These provisions directly tie into the policy changes that resulted in the Pradhan Mantri Awas Yojana (PMAY).
This scheme, launched in 2015, aims to provide affordable housing to citizens, especially the economically weaker sections and low-income groups. Under the PMAY, the government provides financial assistance to eligible beneficiaries to construct or enhance their houses. The scheme also provides interest subsidies on housing loans to eligible beneficiaries.
The Real Estate (Regulation and Development) Act, 2016 (RERA) is also based on the principles laid out by the Indian Constitution. In the spirit of the Constitution’s guarantees of justice to all Indians, this major policy was introduced to protect home buyers’ interests and bring transparency and accountability to the real estate sector.
RERA requires all real estate developers to register their projects with the regulatory authorities and disclose all relevant information about the project, such as the carpet area, the project’s cost, and the project’s status. RERA also provides for the establishment of a Real Estate Appellate Tribunal to resolve disputes between developers and home buyers.
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By: Akash Pharande, Managing Director – Pharande Spaces