The government in the upcoming budget should create a Rs 10,000-crore fund to complete stalled real estate projects across the country and provide relief to over 500,000 people who have booked properties, according to home buyers' body FPCE.
In its budget recommendation to the finance minister, Forum For People's Collective Efforts (FPCE), earlier knows as Fight for RERA, also demanded that home buyers should be categorised as primary secured creditors.
"You are aware there are over five lakh home buyers whose hard earned life savings are stuck in different real estate projects across the country due to indefinite delay and fund diversion by builders," FPCE President Abhay Upadhyay said and pitched for the creation of a stress fund to end the mental and financial stress of these home buyers.
The memorandum further noted that "despite RERA (realty law), most of the ongoing projects have not been completed. It is time now to end this problem by creating a stress fund' to the tune of at least Rs 10,000 crore to complete stuck real estate projects on pan India basis."
The objective should be to complete all pending real estate projects pan India within a span of five years, it said.
"This will clean-up the sector, infuse rapid development, restore faith in the sector, and with strict implementation of RERA, the chances of recurrence of such delays will be minimal," FPCE said.
The association said that delay in project execution is the biggest bane plaguing the real estate sector.
"This has also become a breeding ground for seeking insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, under which the home buyers are categorised as unsecured creditors, thus putting their life's savings to risk," the memorandum said.
Hence, it suggested that the Centre should immediately, either through the Finance Bill or otherwise, move an amendment to the Insolvency and Bankruptcy Bill, 2016, providing for home buyers to be made 'primary secured creditors'.