The real estate sector in India, which employs maximum number of people after the agriculture sector and contributes to over 6 per cent of India’s GDP, has got some relief but is seeking the government to solve a few other crucial problems. But the ongoing lockdown, which has brought almost all sectors to a screeching halt, has some repercussions for this sector as well. Even in the Rs 20 lakh crore package announced by FM Sitharaman, there were a few announcements relating to real estate.
And it was after this announcement by FM that apex real estate body CREDAI has written an open letter to PM Modi seeking some immediate measures from the government to help the sector. It also says that while the loan moratorium will be helpful, the sector wants a onetime restructuring scheme, as allowed by the RBI in 2008 in the wake of global financial crisis.
However, the government, in its package announced that the deadline for the completion of real estate projects would be extended by up to six months in the face of the COVID-19 and it should be treated as a ‘Force Majeure’ event under the Real Estate Regulatory Act (2016). While this announcement certainly would have had provided relief to the sector, this not the only relief they are looking at, considering the massive size of the sector.
Navin Raheja, CMD, Raheja Developers, throwing light on the six-month extension provided by the government said, “Providing extension of six months for completion of projects was indeed warranted particularly for NCR-based developers considering that construction activities were also stalled in Delhi NCR in the month of October and November due to severe air pollution. In fact, for NCR-based developers, the extension should be ideally by none months.”
However, Yash Miglani, MD, Migsun Group said, “RERA extension has definitely come as a breather in these tough times. But disruption in supply chain and issue of labor shortage cannot be ignored for long. Our sincere request is to decision making bodies to chart out a plan for developers for overcoming these challenges.”
But adding to the woes of real estate sector, reverse migration is posing a fresh challenge for the sector. Vijay Verma, CEO, Sunworld Group said, “We welcome the measures taken by the RERA for extending our timelines but our sincere appeal to the government will be to look into the issues arising from labor shortages and scarcity of raw materials.”