Freed from the restraints of power, Rahul Gandhi is having a ball accusing the NDA government of this and that. After calling the government anti-farmer and pro-industry, the other day he was found schmoozing with home buyers where he accused the government of bringing a "pro-builder" real estate bill. He claimed the NDA bill diluted all the good provisions of the bill brought forth by the previous UPA government. The Congress scion is gearing up to protest along with home buyers at Jantar Mantar in the national capital.

The real estate bill allegedly dilutes the penalties for late delivery of homes and does not safeguard buyers if builders divert money from one project to another. Rahul Gandhi said he would fight for home buyers the way he stood by farmers and tribals.

But maybe, he should check his facts before pointing fingers against the government.

Firstly, Gandhi used the example of a Delhi-based home buyer who had been duped in 2012. But wasn't his own party ruling both at the centre and in that national capital at that time? Or has he also forgotten that the Congress party was in power for a decade, and the real estate bill was introduced (but not passed) only in the penultimate year of its tenure in 2013. Why didn't Rahul stand on the side of home buyers during his party's 10 years in power?

Secondly, Rahul's statement that the bill was pro-builder makes him an ace hypocrite. Wasn't his own brother-in-law, Robert Vadra, in cahoots with DLF for buying land near Delhi for which his company simply didn't have the money? And didn't Rahul and Sonia Gandhi themselves use Congress party funds to grab Delhi's prime property, the National Herald?

Thirdly, Gandhi alleged: "Our Bill clearly defined carpet area as the net usable area minus the walls, as defined under the National Building Code, but the NDA government’s bill does away with that." But maybe he should read the draft bill again. The bill says that real estate can only be sold by the actual carpet area. This means builders will have to quote costs per square foot of carpet area. Without the bill, the aam aadmi would have been fooled into believing he gets a larger house for a lower price since the super-built up area includes lifts, corridors, common areas, club house, etc.

Fourthly, the UPA bill was applicable only to residential real estate. It is now proposed to cover both residential and commercial real estate. So even real estate agents, smaller projects and commercial projects are expected to be registered under the Real Estate Regulatory Authorities. Developers cannot advertise or launch property without prior registration.

Fifthly, one of the biggest contentions of the real estate bill was the watering down of the clause that required 50 percent of all money received by the builder from the buyer to be transferred to a separate escrow account, which could be used only to meet construction expenses from the proposed 70 percent earlier.

But as Ashutosh Limaye, Head, Research & Real Estate Intelligence Service, JLL India, said: "For real estate developers, land is becoming increasingly expensive to buy, especially in bigger cities. So the 50 percent cap, in a sense, is fair to both home buyer and builder.”

Land is expensive - and it is expensive because politicians control its supply and hold large chunks in benami names. If 70 percent of the funds were kept in an escrow account, the builder would have only 30 percent of free money to meet costs like land acquisition, security deposits and fees to authorities for sanctions, statutory clearances, etc. In metros and big cities, the cost of land is so high that it would be impossible to meet the initial expenses even with the 50 percent norm. (Check out page 35 of the Standing Commitee report in 2013-2014.

The biggest advantage of the real estate bill is that it finally brings about consumer protection measures. For instance, specifications in projects cannot be altered at the sweet will of the promoters unless the consent of at least two-thirds of the buyers of the project has been obtained. Buyers can claim refunds with interest and compensation if promoters fail to deliver projects in time. If rules are violated, projects will be deregistered and penalties will be imposed on the developer. Another proposal is that a developer will not be able to launch or market any project unless all approvals are in place. Today, developers sell units, saying some approvals are awaited. If these don’t come through, it is the buyer who suffers.

As Vinayak Chatterjee, Chairman of Feedback Infra, writes in this Business Standard article, "a bunch of current projects could get delayed as developers adjust in the short to medium term to the discipline of earmarking designated funds for specific projects. Also, waiting for all approvals to fall into place is likely to stretch the working-capital cycle. Prices may adjust upwards as carefully camouflaged 'super-area' quotes stand exposed against the harsh glare of 'carpet-area' pricing," but unscrupulousness builders will no longer get away with abandoning a project or delaying the delivery of a house.

The bottom line is that Bill might push up property prices in the medium term because it calls for a lot of compliance. But in the long term, the measures could help buyers and not builders, as Gandhi contents.