NCLT Fails to Revive Stalled Real Estate Projects: Manohar Lal Urges Reforms
Union Minister Manohar Lal criticizes NCLT for failing to resolve stalled real estate projects, urging systemic reforms, transparency, and alignment of circle rates with market values.
NcltReal EstateReformsCash TransactionsReraReal EstateAug 30, 2025
Speaking at NAREDCO’s annual convention, Manohar Lal stressed the importance of curbing cash transactions, which he described as a significant issue in the real estate sector. He stated, “Cash dealing is a big problem in the real estate sector.” The minister also cautioned builders against using misleading advertisements to promote projects and underscored the need for aligning circle rates with prevailing market values to discourage unaccounted money.
Manohar Lal noted that disputes between homebuyers and builders have decreased significantly since the introduction of the Real Estate (Regulation and Development) Act (RERA) in 2017. However, he acknowledged that there have been cases of fund diversion from escrow accounts without completing construction works. The minister said he was aware of such cases and the individuals involved.
Regarding NCLT cases, Manohar Lal criticized the tribunal for not improving the system as intended. He stated, “NCLT has not been able to improve the system as it was envisaged.” The minister expressed 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 mentioned that a presentation has been prepared in consultation with the Corporate Affairs ministry and will soon be presented to the Prime Minister. He emphasized the need to correct the system and called for a collective effort to achieve this. Manohar Lal also called for faster approval processes and urged NAREDCO to write to the state government for ease of doing business.
The real estate sector plays a crucial role in India’s economy, contributing 8-10% to the GDP. Manohar Lal highlighted the target of raising this share to 18% by 2047, noting that the country is advancing swiftly under Prime Minister Narendra Modi’s leadership. He pointed out 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.
In an effort to boost affordable housing, the Union Housing and Urban Affairs Minister 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). He said that 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.
Manohar Lal 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.
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 the 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.
Frequently Asked Questions
What is the main issue with the NCLT in resolving real estate projects?
The National Company Law Tribunal (NCLT) has failed to resolve stalled real estate projects, according to Union Minister Manohar Lal. He criticized the tribunal for not improving the system as intended and for failing to complete projects that could otherwise have been saved.
Why are cash transactions a problem in the real estate sector?
Cash transactions are a significant issue in the real estate sector because they contribute to unaccounted money and lack of transparency. Manohar Lal urged developers to avoid such practices to ensure the sector's proper growth.
What is the role of RERA in the real estate sector?
The Real Estate (Regulation and Development) Act (RERA) has significantly reduced disputes between homebuyers and builders since its introduction in 2017. It mandates the use of escrow accounts to prevent fund diversion and ensures transparency in the sector.
What is the target for the real estate sector's contribution to India's GDP?
The target is to raise the real estate sector's contribution to India's GDP from 8-10% to 18% by 2047. The sector is advancing swiftly under Prime Minister Narendra Modi’s leadership, with the country’s GDP growing 7.8% in the April-June quarter of this fiscal year.
What measures are being taken to promote affordable housing?
The Centre, in consultation with states, will develop a mechanism to keep land prices for affordable housing projects lower than other housing segments. A meeting of state housing ministers and senior policymakers will be convened to reach a consensus on affordable land pricing.
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