Sunday, September 27, 2009

Education Loan another Sub Prime Crisisi



Government of India is likely to bring a bill in the Parliament to monitor real estate sector and to protect the interest of home buyers from bad builders and developers. It is true there are many unscrupulous builders in our country who do not have valid documents to start construction but who have taken full payment of the flats they illegally sold to home seekers. There are many such builders whose landed property is disputed, who do not have duly approved map for construction. Many builders take advance booking and fail to complete the project in time and thus the home buyers stands cheated without any visible solution to his problem. All these problems are mounting alarmingly in most of the towns and it is very much urgent to enact suitable legislation to nip in the bud before the aggrieved people initiate a violent movement against the builders.

This is really a very good step and it will help preventing greedy builders, developers and fraudulent owners of property cheat the poor and innocent home seekers. There must be provision for stern punishment to those builders who fail to handover the possession of flats or house to home seekers strictly in time and of the quality as good as promised while accepting booking for a flat or a house. This will definitely create a healthy atmosphere and there will be a fear of action in the mind of bad builders and at the same time home buyers will feel safe in buying the flat. As a result of such safety steps taken by the government, more and more buyers of home will come forward and eventually increase the demand as desired by the government. It hardly matters whether interest rate is less or more by one or two percent for home loan seekers so far as buying a flat from such builders is concerned. Matter of safety is of paramount importance for those persons who intend to buy a flat. Undoubtedly government is moving in right direction.

It is worthwhile to suggest here that similar regulating body must be formed to monitor the opening and functioning of colleges and schools of higher and primary education with provisions for stern action against the person who charge exorbitant fees from students and fail to feed them quality education as promised in their prospectuses and as promised through advertisements. If government fail to take immediate steps to protect the interest of students there is no doubt that future of education will be jeopardized but also it will adversely affect the availability of job opportunities for such ill-fed and less talented students and ultimately endanger the education loan portfolio of various banks.

It is not out of place to mention here that government in the past has waived huge amount of small bad loans of the banks which became bad due to faulty policy of dirty politicians who indulged more in vote bank politics and less in social agenda. Similarly if education loan goes bad, government will face the worst kind of financial crisis in near future, worse than sub prime crisis of USA.

Last but not the least, need of the hour is to ensure execution of such healthy policies than to frame and forget the same. There has been unprecedented rise in prices in real estate as also education sector and they need close monitoring.

Danendra Jain
Agartala

28th September 2009