Since 1991, economic liberalisation has been infused into almost all industries - automobile, aviation, banking. Real estate is the only crucial sector left out.

The economic freedom granted by Dr Manmohan Singh has opened up a whole new array of choices for the Indian consumer, who has easy access to the world's best cars, telephones, banks and airlines. From an economy of shortages, we have moved towards a surplus economy and it is against this backdrop that we should view the real estate industry.

Archaic laws like the Urban Land Ceiling Act, the Rent Act, high stamp duty and other equally outdated rules have contributed their share of impediments. Though the government is aware of the solution - thanks to the National Housing Policy - it has not taken steps to address these issues, perhaps due to ulterior motives. These draconianregulations have failed to meet their objectives and have destroyed the housing industry.

To avoid running the risk of being dubbed an interested party, let me quote from the draft housing policy prepared of the Ministry of Urban Development, which identifies all these problems and offers recommendations. The government must act on these lines and create a surplus in the housing sector so that prices in the metropolis fall and lakhs of Mumbaikars will benefit. Over-regulation has choked growth in the housing sector and it is up to both the state and central governments to initiate steps to bring the miseries of Mumbai's people to an end. First, the policy-makers have to de-frost themselves. For instance, one third of Mumbai has been declared a no-development zone, which bars construction in these areas. Hence, slums have mushroomed in these places and no one can evict these illegal residents. Thus, instead of releasing land for development, the laws instead provide incentives to people to reside in slums.Our town planners are still taking lessons from manuals penned by the British. Can anyone believe that a masterplan for Mumbai was prepared without taking into account 55 per cent of the slumdwellers!

Every country world-wide has a surplus in housing. Why can't we do the same in India? The Rent Act has destroyed the metropolis, where tenants are incapable of moving out as no fresh housing has been created. Whether it is Singapore, Beijing, Hong Kong, or even Dhaka, Colombo or Karachi, accommodation is available on rent. However, one cannot get a rental home in Mumbai.

The Rent Act has also paved the way for the leave and licence arrangement, which does not protect licensors who lease their property. The laws, instead, protect licensees, engendering distrust towards the government. The policies are creating definite roadblocks to a free market in the industry.

Regulations binding housing finance are also lopsided. A person who takes a Rs 5 lakh loan to buy a house gets an Income Tax exemption of just Rs10,000, whereas if he gives the same on rent he gets full deduction irrespective of the amount. The government must provide more fiscal incentives to people buying houses for themselves rather than to those who rent out accommodation.

The time has come to create a buyer's market in Mumbai, where the booming population growth creates the need for at least 50,000 units of houses every year. But we are able to produce only 20,000 units. Imagine the backlog we are generating.

Nevertheless, I foresee a great future for the industry. Any government can achieve greatness by taking a little initiative. We have not addressed the city's problem the right way. We should take lessons from the Green Revolution and the economic liberalisation and repeat their successes in the housing sector. The impetus can come by giving the housing sector the right policies just as the Green Revolution gave farmers incentives like subsidised seeds, land, fertilisers, insurance, making India self-reliant.

The government should nowsingle-mindedly apply itself to creating a surplus in housing in the country. However, the government cannot shoulder the burden of construction alone. In the past, when it tried to play entrepreneur, it ended up a complete failure. The government should, therefore, create an environment for business. As it can not assess demand, supply and the micro-economics of the industry, it should concentrate on providing infrastructural support like transport, sewerage, water supply, security cover and town planning. Since the government has been successful in both the agriculture sector due to the green revolution and, in the industrial sector by economic liberalisation, I do not see why this government cannot repeat the same performance in the housing sector as well.