Finance Minister Goyal to meet bankers to discuss ways to boost realty

A meeting of bankers will take place on how to revive it. Reforms have happened already, like implementation of the Real Estate Act

Piyush Goyal, the officiating finance minister, will interact with bankers on Thursday regarding ways to boost the real estate sector.

A ministry source said, “The sector provides a lot of employment and is important. A meeting of bankers will take place on how to revive it. Reforms have happened already, like implementation of the Real Estate (Regulation and Development) Act.”

Others said banks, realty entities and the ministry will have to work together on this. “With a regularised market, the quality of lending will improve. The emphasis has shifted from pre-promotional launches to fully constructed ones. Bankers will find a larger opportunity to fund construction activities,” a banker said.

Earlier, builders used to come with a proposal, they used to raise money from the market and there was no one to check if they were constructing or not. With the changed rules, every builder has to first get a project approved and create an escrow account for funding it. “They will require funding from banks. Banks will monitor as well. There should be construction-linked disbursement, according to the norms now,” the banker said.

According to Anuj Puri, chairman of ANAROCK Property Consultants, the sector is getting back on track, buoyed by positive consumer sentiment and favourable policies. He said 2018 had started on a positive note, with the first quarter recording a quarter-on-quarter increase in housing sales. The momentum seems to be increasing. With nearly 1,800 unit sales added across the top seven cities, April alone (first one in the new financial year) saw a 25 per cent increase in absorption across these seven cities as against March, he added.