Global rating agency, Crisil has said today that the implementation of the new estate regulatory rules, which were recently cleared by the union cabinet, will lead of higher demand for residential property in the country and increase growth in the sector.

The Real Estate (Regulation and Development) Bill was approved by the Union Cabinet on Tuesday. The government will set up a regulator for the sector and the bill also provides for jail term of up to three years for developers for various offenses including misleading advertisements, which often target consumers in the market.

Meanwhile, real estate firms have said that the new rules will lead to more corruption and their harassment. The Confederation of Real Estate Developers of India (CREDAI) pointed out that the bureaucrats will now have to power of registration and deregistration of projects and this will impact the firms in an adverse manner.

Lalit Kumar Jain, Chairman, CREDAI said, "It would encourage corruption and only those with political influence could survive."

The government officials have said that the Real Estate (Regulation and Development) Bill is aimed at regulating the real estate industry and safeguarding the interests of homebuyers. It includes rules like compulsory registration and penal clauses for builders for violation of laws.