The Supreme Court's unusually furious broadside against the real estate company Amrapali - "you are perfect liars", the judges declared, and "the worst kind of cheaters in the world" - gives voice to this, one of the greatest fears of the Indian middle class. Tens of thousands of flats - 42,000, according to most reports - were due to be built by the company, but the home-buyers in question haven't seen them yet. According to the group of home-buyers who petitioned the courts, the company has made off with Rs.3,000 crore of other people's money. The court has not pronounced on this matter yet, but somehow I think that the judges are not likely to look favourably on a company that they have already labelled as the worst cheaters in the world.

This is the trap that Indian real estate has found itself in: many tens of thousands of people have already bought flats; many of the companies that they gave the money to are effectively bankrupt. But a sector dominated by companies with such dodgy balance sheets is incapable of building any more. The government is faced with a choice: should it help make things easier for the companies that nobody trusts? Or should it abandon them to their fates, knowing that this means that many home-buyers will never see their houses, and that there will be a long and painful period of adjustment before new companies start building again to serve another set of home-buyers?


But, in actual fact, that attempt to protect home-buyers might make things worse. Now it is banks that are furious, because they may not get as much of their money back - which means in turn they will be reluctant to lend to real estate companies in the future, and fewer houses will get built because of this shortage of credit. But as Finance Minister Arun Jaitley himself points out, the central problem of the sector is that real estate companies don't have enough financial resources: "Some developers have very little resources of their own. They use the home-buyer's money to develop, invest in land banks and then get caught in debt trap." But the consequence of the dating up of bank credit after the ordinance will be that real estate companies will have to depend even more on the money they get up-front from home-buyers - which means the change might actually increase the risks taken by future home-buyers, instead of decreasing it!

This entire sector looks so messy at the moment, therefore, that it's hard to see how Narendra Modi's promise of "housing for all" by 2022 can be met. Indeed, we seem decades away from that goal.