NCLT has failed to resolve stalled real estate projects; cash transactions are a major concern: Manohar Lal
Union Housing and Urban Affairs Minister Manohar Lal on August 30 said the National Company Law Tribunal (NCLT) had failed to resolve stalled real estate projects and called for systemic reforms to safeguard the interests of both consumers and banks. He also urged builders to avoid cash transactions, misleading advertisements and emphasised the importance of aligning circle rates with market rates.
Speaking at NAREDCO’s annual convention, he urged developers to steer clear of cash transactions, which he described as a “big problem” in the real estate sector, and stressed that eliminating such practices is crucial for the growth of the sector that contributes 8-10% of the country’s GDP.
“Cash dealing is a big problem in the real estate sector,” the minister said.
The minister also cautioned builders against using misleading advertisements to promote projects.
He also underscored the importance of aligning circle rates with prevailing market values to discourage unaccounted money.
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On RERA
Manohar Lal further noted that disputes between homebuyers and builders have come down significantly since the introduction of the Real Estate (Regulation and Development) Act (RERA) in 2017.
He said there have been some cases of diversion of funds, which are kept in escrow accounts under the RERA law, without doing construction works. The minister said he was aware of such cases and the people involved.
NCLT cases
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. He said that if any project that could otherwise have been saved goes to the NCLT, it is certain that it will never be completed.
“This (NCLT) is a government system which I am criticising. I am doing this with the consent of the Prime Minister,” he was quoted as saying by PTI.
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,” PTI quoted him as saying.
Referring to delays in approvals for development of projects, he asked the NAREDCO to write to the state government for ease of doing business and a faster approval system.
Best practices of a state should be replicated by other states, he said.
The minister underscored the crucial role of real estate in India’s economy, pointing out that the sector contributes 8–10% to GDP. He emphasised the target of raising this share to 18% by 2047, adding that the country is advancing swiftly under Prime Minister Narendra Modi’s leadership.
He highlighted that the country’s GDP grew 7.8% in the April-June quarter of this fiscal year, despite concerns over potential setbacks from the 50% tariff imposed by the United States.
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Land prices for affordable housing projects
The Union Housing and Urban Affairs Minister Manohar Lal also announced that the Centre, in consultation with States, will develop a mechanism to keep land prices for affordable housing projects lower than other housing segments, particularly under the Prime Minister Awas Yojana (PMAY).
Speaking at the valedictory session of the 17th NAREDCO National Convention, he said a meeting of State housing ministers and senior policymakers will be convened to reach a consensus on affordable land pricing. While he did not specify a timeline, he confirmed that the discussions will be part of broader reforms aimed at accelerating housing activity nationwide.
The minister urged NAREDCO members to engage with state-level policymakers, as land is primarily a state subject and the Centre can only persuade states to relax land prices for affordable housing.
He further stressed that once lower land prices are introduced, developers must ensure affordable housing units are constructed at appropriate sites. Choosing substandard locations, he warned, could undermine the credibility of the real estate sector.
Metro rail expansion
Speaking on metro rail expansion, the minister said India currently ranks third globally, with 1,036 km of metro lines operational. He added that with around 900 km under construction, the country is set to surpass the US and become the world’s second-largest metro network. The minister also highlighted efforts to improve last-mile connectivity for metro commuters.
Previously addressing NAREDCO’s annual convention in New Delhi, the association’s president G Hari Babu, urged state governments to reduce stamp duty on registration of affordable homes priced up to ₹45 lakh per unit to boost demand and supply of low-cost apartments. He asked builders to avoid cash dealings in property transactions for the proper growth of the real estate sector that contributes 8-10 per cent to India’s GDP.
