NAREDCO in News
 
Media Room
 
Industry News
 
Articles
 
National Realty e-Magazine
 

Industry News

Select a year 


JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember                Back

 
Builders want government to speed up real estate reforms
The New Indian Express  |  May 29, 2019

Anuradha Shukla Express News Service

With about 5 lakh real estate projects stuck and delayed across the country, the realty sector is expecting the new government to come up with an instant policy fix, having been hit by demonetization, dragged down by GST and parched for funds due to the NBFC crisis. The sector has been struggling over the past few years with falling sales, steadily rising inventory and stagnant prices despite the government’s initiatives to reform the sector: from passing the RERA (real estate regulatory authority) Bill in 2016, implementation of the Goods and Services Tax (GST), providing interest subsidy for affordable houses under Pradhan Mantri Awas Yojana scheme, the Benami Transactions (Prohibition) Act, Insolvency and Bankruptcy Code, etc.

 

However, while many of these measures have improved consumer confidence, developers feel the sector is yet to see any of the green shoots of recovery. If the government does not take quick policy measures, the recent NBFC crisis may further dent chances of real estate recovery. “In the last term, the government has taken a number of steps for the betterment of the sector. Now, with a stable government, we expect more positive reforms for the sector from the ruling government. There are two major pending demands which we expect to be fulfilled in this term: the long-pending industry status for the real estate sector and online single window clearance to ease the long process of approvals,” said Kaushal Jain, MD, Arihant Group.

 

Although the government has taken some initiative in swifter project implementation, the sector feels that the delay in getting clearances leads to increased costs, which ultimately has to be passed on to the home buyer.

 

“The new government can do away with unnecessary documentation. It is important that single window clearance is soon put into practice, which will not only resolve operational issues prevalent in the industry, but improve the productivity of the real estate industry. Currently, the permissions are coming at a snail’s pace,” says Surendra Hiranandani, Founder and Director, House of Hiranandani.

 

The ongoing liquidity crisis is another issue that developers feel is causing a number of project delays. “In this term, we expect the government to undertake the reforms which have been under the spotlight in the last term&hellip we expect it to provide a single clearance window and to further resolve the liquidity crunch to help the builders complete stalled projects,” Anupam Gupta, Director, Sales and Marketing, GBP Group said.

 

While the government has already initiated some reforms in the GST rates for affordable housing, developers feel that the inclusion of stamp duty, registration charges and taxes on the cost of electricity under GST will go a long way in bridging the widening gap between the demand and supply in the segment.

 

Another major concern for developers is the rapidly increasing cement prices, which directly impacts the cost of construction. The reduction of GST on cement from 28 per cent to 18 per cent also remains a long pending demand from the sector.

 

Funding continues to remain a concern

 

While many of the measures  over the last five years have improved consumer confidence, developers feel the sector is yet to see any of the green shoots of recovery. If the government does not take quick policy measures, the ongoing NBFC crisis may further dent chances of real estate recovery, they point out. More than a lakh apartments across the country currently  remain incomplete, primarily due to the inadequate availability of funding. The NBFC crisis could worsen this.