NEW DELHI: Real estate sector in India has estimatedly lost Rs 1 lakh crore crore, a loss which is rising with each passing day, said Niranjan Hiranandani, president, National Real Estate Development Council (NAREDCO).
Hiranandani suggested that the economic stimulus package for all industries across the economy should be atleast 10 per cent of the country’s GDP. “If you can overcome the crisis today, you may be able to stand up tomorrow,” he explained.
Stressing on the need for a one-time rollover for debt restructuring as also provision and working capital requirement as a ‘must do’ as part of the economic stimulus package, he said more credit supply needs to be extended to industries across the economy.
Post the pandemic, Hiranandani estimated delays in on-going projects to range from 3 months to a year and half, depending upon the stage of the project and location, among other factors. Site labor remains major issue, unless they get back to routine work under strong adherence of COVID19 guidelines and paid for the same, they will end up returning to their villages and shifting to agriculture
This will translate into lack of skilled workers across various industries in cities morphing into agricultural labor, and to prevent this, it stands imperative to permit work to restart at construction sites where labor are present and being looked after.
On the possible fall in prices post the pandemic, he said price-points would come down as there would be some ‘desperate to sell’, but this would again depend upon location and type/ segment of individual projects. It is not price; we need a vibrant economy.
Parveen Jain, vice chairman, NAREDCO said, "Real estate projects need multiple compliances such as fire safety, environment, building plans and licence etc. These in general take time. But due to the current lockdown the process has become even more complicated and tardy. Hence an extension by a year would help theindustryin a big way."
The realtor's body has demanded a stimulus of over USD 200 billion with an ability to go up to USD 300 billion with USD 100 billion provided immediately, USD 100 billion in four months and the last USD 100 billion in eight months. It also requested reduction in GST across the board by 50% for three months and 25% for the fiscal. The final GST due should be payable in 6 quarterly instalments starting October 2020 with no interest.
"RBI should declare an EMI waiver on all loans to extend for 6 months and enhance permissible stamp duty variance to actual consideration under Section 50C, 50CA and 56(2)(x) upto 30% of stamp duty value. Section 43CA which states that sales of less than 10% of the circle rate price will be dealt with punitive consequences will further exacerbate the crisis by constraining developers from selling their flats at a discount," said NAREDCO.
April 09, 2020