Realtors' apex body CREDAI on Monday said the industry is going through a lot of pain due to the COVID-19 pandemic and urged the government to take fiscal measures for improving the liquidity position of cash-starved developers.
The industry body, which represents more than 20,000 builders from across India, has sought financial support in the form of interest waiver and extension of moratorium period till March 2021 for the real estate sector that has been badly impacted by the coronavirus pandemic.
The Confederation of Real Estate Developers' Associations of India (CREDAI) fears job losses as well as delays and defaults in delivering the projects to homebuyers if the government does not come to the rescue.
"There is a pain in the industry because of the cash flow issues. The sector deserves a little sympathetic look and industry need to be supported," said Irfan Razack, the past Chairman of CREDAI, in an interview with PTI.
Razack, who is the CMD of the country's leading realty firm Prestige group, said the industry does not want any loan waiver but some rebate in interest and interest on interest so that developers can make up for the losses incurred during the lockdown period.
"Home deliveries have to happen. People have put their life saving in buying their dream homes," he said.
Razack urged the government to take a "compassionate" view for survival of the industry as it provides huge number of white collar jobs as well as employment to labourers.
CREDAI's Maharashtra chapter CREDAI-MCHI had filed a petition in the Supreme Court seeking waiver on interest as well as interest on interest during the moratorium period on term loans.
CREDAI-MCHI has suggested that the interest and interest on interest should be waived for March- August 2020 period on all loans and advances given to all borrowers engaged in real estate sector who are not declared as NPA till February end.
It also demanded that the moratorium policy be extended by the RBI till March next year.
During this extended period, CREDAI-MCHI wants that simple interest should be charged at a rate equivalent to rate of interest offered by banks on fixed deposit. The interest so charged be capitalised by extending the residual tenure of loans.
Getamber Anand, the past Chairman of CREDAI and chairman of ATS group, said the loan restructuring mechanism announced by the RBI would not benefit many players and demanded that all those loan accounts which were not NPA on March 1 this year should be restructured.
He said the industry is facing working capital challenge as demand has gone down.
Highlighting the importance of the sector and need for a financial package to revive the industry, Kunal Vajani, Head of Chambers - BlackRobe Chambers, said the real estate sector contributes about 5-6 per cent of the GDP and is the second largest employer as well as supports 270 ancillary industries.
Vajani, who is fighting this case on behalf of CREDAI-MCHI, said relief package for the real estate industry has been announced in more than 15 countries.