Finance minister Nirmala Sitharaman has called a meeting today to finalise a relief package for real estate sector. Sitharaman is likely to soon announce measures to boost the sector as the government faces a big jolt on the economic front with the country’s Gross Domestic Product (GDP) growing at its slowest pace in over six years at 5% during April-June quarter of 2019-20.
“The meeting has been called to discuss the issue of homebuyers who are stuck in the stalled projects. The setting up of a stressed fund to complete these projects is likely to be finalised as well as other steps to revive the sector,” an official close to the development said.
Housing and Urban Affairs minister Hardeep Puri is also likely to attend the meeting at the North Block.
BRICK BY BRICK
The homebuyers as well as real estate players have been demanding the creation of a stressed fund to the tune of Rs 10,000 crore to complete the stalled projects. The homebuyers of the National Capital Region (NCR) are most affected with developers like Jaypee, Amrapali, Unitech and 3C defaulting in completing their housing projects.
“The government is likely to announce a stressed fund to complete these unfinished projects,” the official said. As many as five lakh homebuyers are stuck in different projects across the country due to delay in completing projects due to liquidity crunch and fund diversion by developers.
Earlier, a high-level group was set up under Puri to move forward on the issue of homebuyers by exploring the possibility of creating a stressed fund to complete pending projects.
The government is also likely to enlarge the scope of the definition of affordable housing from the current Rs 45 lakh so that more projects can come under it. The cost of the affordable house has been fixed at Rs 45 lakh and below. The developers get a tax holiday on the profits earned by them on affordable housing. Real estate players have demanded that the limit of affordable housing should be increased to Rs one crore in metros from Rs 45 lakh at present.
Last week, the government announced liquidity support of Rs 20,000 crore in addition of Rs 10,000 crore by the housing sector regulator National Housing Bank (NHB) to help the real estate sector which is facing a cash crunch and demand slowdown.
As part of measures to revive the economy, the finance minister had last week also announced a stimulus package for the auto sector. She had also said that the government would come up with measures for the realty sector in the coming weeks.
On Friday, Sitharaman unveiled a plan to merge 10 public sector banks to create four big banks with the capacity to enhance credit and also announced recapitalisation to the tune of around Rs 55,000 crore for the banks.