In a first-of-its-kind meeting, real-estate developers, industry bodies, and homebuyer associations together met Finance Minister (FM) Nirmala Sitharaman and Minister of Housing and Urban Affairs Hardeep Singh Puri on Sunday to discuss the problems of the sector.
In the two-hour meeting, Sitharaman, while giving an assurance to industry players that issues of liquidity, regulations, and taxes would be looked into, made it clear that the interests of homebuyers would be given utmost importance and all stalled projects were to be completed soon.
Representatives of industry bodies, including the National Real Estate Development Council (Naredco), Confederation of Real Estate Developers’ Associations of India (Credai), Central Advisory Council of the Real Estate Regulatory Authority (Rera), and Federation of Apartment Owners Association were part of the meeting.
“The FM met officials of the housing ministry, corporate affairs ministry, revenue department and finance department, and representatives of Rera, the industry, and homebuyers, and looked at a number of issues the government would address. We hope this process will be useful in finding solutions to the problems of the real-estate industry. The government is finding ways to resolve issues regarding homebuyers and stalled projects,” said Puri to the media.
In an effort to tackle slowdown in multiple sectors, the government over the past few days has had meetings to ensure stakeholders that demands would be looked into. The real-estate sector, which has been in the doldrums for almost four years now, has been demanding regulatory as well as tax changes, so that demands picks up, liquidity increases, and money starts flowing in.
“The government is concerned about the sector. We have addressed the issue of liquidity as the No. 1 crisis. Non-banking financial companies that had earlier committed money are withdrawing. Banks have liquidity of more than Rs 1.75 trillion, but they are neither giving it to real estate nor anyone else, and they need to put that in the market,” said Niranjan Hiranandani, president, Naredco.
He added the sector suggested a rental housing policy also because Housing for All, as the Prime Minister has said, was based on ownership as well as a ‘stress fund’ to complete projects in trouble, especially in the Delhi-National Capital Region (NCR).
“The FM has already suggested in the Budget that it would come out with a rental housing policy. Also a stress fund is required for marginal projects because banks and funds are not giving money. So in areas such as the NCR, where there are incomplete projects, the stress fund can be used to finish them,” he added.
One suggestion was to set up a task force to identify stalled projects, assess how much money was needed, and how much could be recovered.
Credai suggested that Rera should be the first protocol for stalled projects because it knows the structure better. It believes that if financial institutions come under the ambit of Rera, problems will be solved faster. Also the FM is likely to chair another meeting to especially discuss stalled projects.
Airing some of the tax concerns under the goods and services tax (GST), experts said input tax credit should be brought back with a higher GST as it was earlier.
“We have requested that the regime of 8 per cent GST with input tax credit should be brought back because 5 per cent without input tax credit translates into 14 per cent, putting too much burden on the homebuyer. The government should also remove the tag of ‘investor’ from those who are buying more than one house,” Abhay Upadhyay, member, Central Advisory Council, Rera, told the media.