NCLT's Ineffectiveness in Reviving Stalled Real Estate Projects: Manohar Lal's Critique
Union Housing and Urban Affairs Minister Manohar Lal criticizes the NCLT for failing to revive stalled real estate projects and calls for system improvements, RERA compliance, and GDP growth.
NcltReal EstateReraGdpManohar LalReal Estate NewsAug 30, 2025
Addressing the realtors' body, Lal urged builders to avoid cash dealings in property transactions to ensure the proper growth of the real estate sector, which contributes 8-10% to India's GDP. He also directed the real estate industry to avoid misleading advertisements while marketing their projects.
"Cash dealing is a big problem in the real estate sector," the minister stated. The government is making efforts to eliminate cash dealings in property transactions, and he called on the industry to play its part. Lal also highlighted the importance of aligning circle rates with market rates to discourage cash transactions.
The minister noted that the number of disputes between builders and consumers has decreased since the enactment of the Real Estate (Regulation and Development) Act (RERA) in 2017. However, he acknowledged that there have been instances of fund diversion from escrow accounts, which are meant to be used for construction works. He said he was aware of such cases and the individuals involved.
Referring to real estate cases under the NCLT, Manohar Lal pointed out that banks approach the tribunal in cases of default by builders in repaying their loans. "NCLT has not been able to improve the system as it was envisaged," the minister said. He added that if a project that could have been saved ends up in the NCLT, it is unlikely to be completed.
"This (NCLT) is a government system which I am criticizing. I am doing this with the consent of the Prime Minister," Lal clarified. He mentioned that a presentation has been prepared in consultation with the Corporate Affairs ministry and will soon be presented to the Prime Minister. "We need to correct the system, and if we do it together, it will be better," he said.
Lal also addressed the issue of delays in approvals for project development, urging NAREDCO to write to state governments for ease of doing business and a faster approval system. He suggested that best practices from one state should be replicated by others. He cited the example of the Haryana government, where he was the Chief Minister, which adopted a single-window clearance system and launched schemes for stalled projects due to the COVID-19 pandemic.
The minister stressed the importance of the real estate sector, which contributes 8-10% to India's GDP, and called for increasing its share to 18% by 2047. He noted that the country is growing rapidly under the leadership of Prime Minister Narendra Modi. The country's GDP grew by 7.8% in the April-June quarter of the current fiscal year, despite concerns about the adverse impact of a 50% tariff imposed by the United States. This high growth rate, according to Lal, will silence those countries that have doubts about India's growth potential.
Lal also highlighted the significant improvements in infrastructure over the past 11 years of the Modi government. He mentioned that India is currently ranked third globally in metro rail with 1,036 km operational and is set to become the second largest in the world as around 900 km of metro rail is under construction. He also spoke about providing last-mile connectivity to people traveling by the metro rail network.
Frequently Asked Questions
What is the main issue with the NCLT according to Manohar Lal?
Manohar Lal criticized the NCLT for failing to deliver the desired results in cases of stalled real estate projects and not improving the system as it was envisaged.
Why did Manohar Lal urge builders to avoid cash dealings in property transactions?
Lal urged builders to avoid cash dealings to ensure the proper growth of the real estate sector and to align circle rates with market rates, which would discourage cash transactions.
What is the contribution of the real estate sector to India's GDP according to Manohar Lal?
The real estate sector contributes 8-10% to India's GDP, and Manohar Lal called for increasing its share to 18% by 2047.
What did Manohar Lal say about the Real Estate (Regulation and Development) Act (RERA)?
Lal noted that disputes between builders and consumers have decreased since the enactment of RERA in 2017, but there have been instances of fund diversion from escrow accounts meant for construction works.
What improvements in infrastructure did Manohar Lal highlight?
Lal highlighted significant improvements in infrastructure over the past 11 years of the Modi government, including India's ranking as the third largest in metro rail with 1,036 km operational and set to become the second largest in the world with around 900 km under construction.
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