India Regulatory Brief: Real Estate Act, 2016 in Effect, Single Window Clearance System for Drones, Satellite Phones

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Real Estate Bill comes into Effect on May 1

The long awaited Real Estate (Regulation and Development) Act (2016) came into force on May 1. After an eight year long process, the Ministry of Housing and Urban Poverty Alleviation (HUPA) was finally able to notify 69 of the total 92 sections of the Act on April 27. This sets in motion the operationalization of the rules and regulatory infrastructure required by the act.

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Section 84 of the Act directs the central and state governments to formulate the rules under the Act within a maximum time frame of six months, by October 31, 2016. Section 20 of the Act directs the appropriate government to establish the Real Estate Regulatory Authority (RERA) within a year of the Act’s commencement. The RERA will decide on the complaints of buyers and developers within a stipulated period of 60 days. Till the RERA gets set up, Section 20 empowers the appropriate government to designate any officer as the interim Regulatory Authority, preferably, the Secretary of the Department dealing with Housing. According to the Act, these regulatory authorities have only three months to formulate regulations concerning day-to-day functioning. Section 43 of the Act calls for the establishment of Real Estate Appellate Tribunals within one year, by April 30, 2017. The tribunals will resolve disputes over the orders of Regulatory Authorities within 60 days.

To save time and ensure uniformity in implementation, the Ministry of HUPA will formulate a Model Rules and a Model Regulations for Regulatory Authorities framework under the Act, for the benefit of states and union territories.  The Real Estate Act intends to boost the sector by creating a transparent environment for consumers, ensuring credible transactions, and the efficient and time bound execution of projects.    

Single Window Clearance Mechanism to include Satellite Phones and Drones

India’s latest initiative in trade facilitation involves a single window clearance system, accommodating requirements of the environmental and telecom industries. Customs ports will also have a dedicated Facebook page to serve as a social media interface so that clients can interact with officials, and leave complaints and feedback. This will promote query solving and quality improvement.

The new single window clearance system ensures that all processing rates and legal paperwork such as customs declarations, applications for import or export permits, certificates of origin, and trading invoices related to items such as satellite phones and drones will be lessened to increase efficiency and save time. The government’s reforms will positively impact the half a dozen or so startups that rely on drones in India, which are being used for purposes such as aerial photography, pollution monitoring, topographical assessment, meteorology, traffic monitoring, and policing and wildlife protection.

The Central Board of Excise and Customs (CBEC), led by Najib Shah, has said it will continue to experiment with trade incentives so as to improve overall commerce conduct in the country.

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Government Supports Regulation to Curb Fraud in Electronic Transactions

Answering questions in the Rajya Sabha (upper house of parliament), the Minister of State for Finance, Jayant Sinha, said the Reserve Bank of India (RBI) is working towards a regulatory framework to curb fraud in electronic transactions.

India is known for its heavy dependence on cash transactions – about 87 percent of transactions are made in cash – as customers fear threat of fraud/loss of money while making electronic payments. This is why the Banking Codes and Standards Board of India (BCSBI) came up with a recommendation in 2014 to limit customer liabilities in case of fraud in transactions through electronic channels. In addition, the RBI launched its Payment System Vision Document 2012-2015 that sought to establish the roles and responsibilities of banks and customers in electronic transactions to minimize fraud, fix responsibilities, ensure zero liability protection to increase customer confidence, and even disincentivize usage of checks above a certain threshold limit by customers and corporates.

Regardless, the above proposals have yet to be converted into successful regulation. What is more favorable in the present context, however, is the current government’s agenda to promote the ease of doing business in the country via wide-ranging economic and regulatory reforms.


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Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email india@dezshira.com or visit www.dezshira.com.

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