Teji Mandi: Coronavirus pandemic injures the real estate sector
Teji Mandi: Coronavirus pandemic injures the real estate sector

An online signature campaign has been started by the CREDAI Action Committee, the apex body of developers, to revive the distressed real estate sector. So far, about 40,000 people have signed this online petition addressed to Prime Minister Narendra Modi.

The petition states, the series of lockdowns necessitated by COVID-19 has stalled the economy and the Reserve Bank of India (RBI) itself has forecast a negative growth. In this context, the developers’ apex body believes that ‘there’s a need to revive real estate in order to revive the economy and, thus, ensure positive GDP growth. Especially since this sector supports 250 to 300 industries with a potential to create 6 crore jobs.’

The CREDAI Action Committee suggested a few measures in its online petition that will help in building confidence among homebuyers. The measures include reducing the rate of interest to 5 per cent or the rate to be subsidised for lower and middle-income groups for the next five years, allowing buyers to pay only margin money with no EMIs for 24 months; changing the definition of affordable housing to Rs 75 lakhs from the current Rs 45 lakhs, allowing a GST of 1 per cent; increasing the limit of principal deduction on housing loan under Section 80C to Rs 2.5 lakhs; empathise with people losing jobs or suffering pay cuts as banks are asking borrowers to resubmit their proofs of income with a view to reassess their eligibility, adding to their unmitigated tensions; and fixing realistic ready reckoner rates as in most cities and areas these are either equivalent or more than the market rates. This will facilitate rationalisation of stamp duty and registration, amongst others.

Similarly, the apex body suggested a few measures that can be taken for the benefit of developers. This includes allowing one-time debt reconstruction for developers to help in completing projects on hand, clearing inventory without any pain; and ensuring banks and NBFCs pass on the repo rate cut benefits to realty developers, too, granting MSME status and benefits for the real estate industry so that the developer community can get some relief. It helps improve consumer confidence in more than 300 ways – real estate developers consume material from 300 industries and houses are purchased by the people at large, the Action Committee believes.

Ajay Ashar Spokesperson CREDAI Action Committee said, "We are not asking for the moon, nor are we seeking any waivers. If these suggestions are implemented, it will help revive the sector."

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