Housing industry representatives met finance minister NirmalaSitharaman on Sunday to press for a special package to revive the realty sector.
The Minister of State – Finance and Minister of Housing and Urban Affairs, along with government officials, also attended the two-hour meeting.
The National Real Estate Development Council (Naredco), Forum For People’s Collective Efforts (FPCE) and the Confederation of Real Estate Associations of India (Credai) represented the industry delegation.
Sitharaman is believed to have given a patient hearing on issues ranging from the NBFC liquidity crisis, taxes, last-mile funding and stalled projects, according to realty developers and representatives of homebuyers’ bodies who took part.
In his representation, Naredco president NiranjanHiranandani said real estate and infrastructure growth have been drivers of economic growth as well as job creation globally, and India was no different.
“Liquidity crisis and the need for tax rationalization are two major challenges facing India’s real estate and infrastructure industry, and quick resolution of the same would go a long way in enabling Indian real estate and infrastructure to play its role in enhancing GDP growth, as also creating jobs,” Hiranandani said.
Credai argued for the Real Estate Regulatory Authority to be given powers to resolve legacy issues and said institutional investors should be brought under its ambit.
“The meeting, being held on a Sunday morning, indicates the sense of earnestness and urgency. Immediate and positive steps from the government will enable developers to contribute…to achieving PM’s vision of ‘Housing for All by 2022’,” said Jaxay Shah, national chairman of Credai.
Liquidity issues, an increase in the cap of affordable housing projects, revival of interest subsidy on home loans, and tax concessions on commercial properties and affordable homes, were also discussed.
“NHB has recently prohibited subvention scheme (where the interest is borne and paid by the developer.) We request that the said circular be withdrawn since affordable housing customers cannot afford to pay EMI and rent till he gets possession,” Naredco said in its representation.
The industry delegation also asked for the creation of a ‘Stress Fund’ of at least Rs10,000crore to complete real estate projects that have been stuck across the country, and an interest rate reduction by banks. It also sought an increase in the affordable housing limit to Rs 1 crore in metros from Rs 45 lakh now, and restoration of 8% GST to reduce tax burden on consumers.
“We were given a patient hearing … I am pretty confident that the government will surely come up with certain concrete decisions based on our recommendations to resolve the issues concerning homebuyers, which will also boost the real estate sector,” said AbhayUpadhyay President, FPCE and Member, Central Advisory Council, RERA.
The IL&FS crisis last year reduced lending by NBFCs during October–December 2018 due to a liquidity squeeze. The funding challenge has hit the real estate sector’s recovery and put pressure on property prices.
As many as 220 projects equaling 174,000 homes are completely stalled in the top seven cities alone, according to ANAROCK research. Launched either in 2013 or before, construction activity has been stalled on these projects.