CREDAI writes to PMO about liquidity crunch in realty sector; seeks bail-out package

The apex association of real estate developers Thursday sent an SOS to the Prime Minister's Office (PMO) saying housing and other projects were facing an acute liquidity crisis after financial institutions stopped disbursing sanctioned loan amounts to builders.

In its letter to the PMO, the Confederation of Real Estate Developers' Associations of India (CREDAI) has demanded a one-time restructuring of bank loans and creation of a 'stressed asset fund' for completion of real estate projects.

It sought Prime Minister Narendra Modi's intervention "to ease the credit freeze in the Indian real estate sector amidst the lack of availability of funds to developers for completion of real estate projects."
The association said the real estate sector is expected to be a beneficiary of multiple reforms, foremost being the Real Estate Regulation and Development Act (RERA) and GST, but currently it is "trapped in a downward spiral of unfinished projects and tapering off of demand."
Stating that real estate sector contributes significantly to the growth of the Indian economy, CREDAI Chairman Getamber Anand said: "At this critical juncture, we seek Government's immediate intervention to provide adequate avenues of liquidity to developers to sustain the revival of Indian realty."
CREDAI President Jaxay Shah said: "Currently, the Indian Real Estate sector is at a stage where it requires the Government's support more than ever before. We have submitted a bouquet of options to resolve this pertinent issue of lack of availability of funds for developers."