'Govt should expedite sanctioning amount from Rs 25K cr stress fund for stalled housing projs'

Realty firms are not able to access money from the government's Rs 25,000 crore stress fund to complete stalled housing projects, and all roadblocks should be removed for success of this scheme, said Anthony De Sa, Chairman, Madhya Pradesh-RERA.

He was speaking at a webinar organised by industry body Nardeco. Real estate regulators, set up under the Real Estate (Regulations and Development) Act, called RERA, of various states addressed over 1,000 members of the association.

The regulators agreed that there is a need to give relief to the sector to tide over the crisis. The authorities assured that they would look into various demands, including extension of the timeline for completing projects.

At the outset, Uttar Pradesh RERA Chairman Rajive Kumar said the construction activities need to start whenever the government permits.

In view of the ongoing lockdown, Kumar said the real estate demand is expected to fall. "There is an issue of funding as well".

The UP-RERA chairman also stressed on adoption of safe practices and proper training to labour force for maintaining hygiene as well as social distancing once construction work starts on the sites.

Anthony De Sa said the problems of liquidity crisis and demand slowdown have exacerbated because of the lockdown.

Talking about the stress fund, he said the government had in November last year created a special window of Rs 25,000 crore for completion of over 1,500 stalled housing projects.

However, he said there are issues in implementation of this scheme, which seeks to help complete 4.58 lakh housing units across the country.

Anthony said existing lenders are not giving the NoCs (no-objection certificates) for creation of first charge to SBI CAP, which is managing this fund.

"Builders are unable to access this fund. We need to remove this bottleneck," he said, adding that some guidelines need to be issued by the Reserve Bank of India or the finance ministry in this regard.

The scheme will become a non-starter, if this roadblock is not removed, said Anthony De Sa.

The UP RERA-chairman also pointed out that the pace of sanctions of amount from this stress fund was slow.

On demand for reduction in GST and stamp duty, the MP-RERA chairman said these are policy issues, but should be considered if needed to boost demand.

However, he reminded that many builders did not pass the benefits of previous GST reduction to homebuyers.

Anthony De Sa also stressed on the need to rationalise the circle rates in various states so that these reflect the current market situation.

Haryana RERA Chairman K K Kahndelwal said steps need to be taken to kick-start engine again and that too at fast pace, as real estate has a multiplier effect on the economy.

He pitched for the single window approval system for development of real estate projects to bring down the property cost.

Nardeco President Niranjan Hiranandani said the industry is facing a challenging time and the financial issues faced by its developer members are "beyond imagination".

He demanded that authorities should provide relief to the industry.

Nardeco-UP Chairman R K Arora raised the issue of not getting funds from the Rs 25,000 cr special window.

Naredco Chairman Rajeev Talwar, Vice Chairman Parveen Jain and Naredco Maharashtra President Rajan Bandelkar were also present in the webinar.