The real estate sector appears set for a transformation in 2013. A much-awaited law to regulate the fast-growing sector, which accounts for nearly eight per cent of India's gross domestic product, may finally be in place this year.

On Wednesday, January 9, Union Housing Minister Ajay Maken said that the Real Estate (Regulation and Development) Bill is likely to come up in the budget session of parliament, which begins in February. The Bill, pending since 2009, will empower consumers and enforce discipline among property developers. 

It proposes to set up an industry regulator along the lines of the Telecom Regulatory Authority of India.

The Bill proposes to get company developing more than 1,000 square metres of land to register the project with the proposed regulator. Developers will also need to submit detailed project reports that include the completion date, land title, names of architects and agents. Further, the legislation proposes to make developers deposit the amount generated from project sales in a separate account in a scheduled bank. And ensure that the amount is not used for any other purpose. 

In addition, the Bill seeks to impose strict penalties for various offences. For instance, in case a developer fails to furnish detailed project reports, the penalty may extend up to five per cent of the estimated cost of the project.

The sector is also awaiting recommendations of a committee on streamlining approval procedures for real estate projects. The committee, set up by the housing ministry under former Competition Commission of India Chairman Dhanendra Kumar, is likely to submit its report this week. Its recommendations will take the shape of policy guidelines to be implemented by all states.

Those recommendations will aim to make the sector more transparent and bring in accountability. The goal is to make the status of building approvals available online, thereby enabling customers to take informed decisions. Currently, many people invest in projects that do not have the necessary approvals. The panel may also propose a single-window clearance for project developers and steps topromote affordable housing.

Pranay Vakil, Chairman, Praron Consultancy India, expects more changes to come through in the budget. "We expect clarity on policies concerning special economic zones, integrated townships and certain sections of the Income Tax Act," he says. "Unless developers adjust themselves to these new regulations, it will be challenging for them to operate."