MOST Experts on Real Estate Hail Measures Announced By FM Sitharam to Boost It. Some Call for Confidence Building Measures Between Buyers & Builders

INDIA’s real estate, one of the sectors worst  impacted by cash crunch , has  welcomed the move announced by Finance Minister Nirmala Sitharaman  to boost their  business  hoping that  more incentives  for saving  the labor intensive  industry will be announced  .Sitharaman said a fund with Rs 10,000 crore would be set up to revive stalled and delayed projects. Most experts have given a thumbs-upped    the measures for the housing sector, but caution that the proposals do not adequately address issues of the sector in terms of continued slow sales and low demand. Finance Minister Sitharaman announced a special provision of Rs 10,000 crore as a last-mile funding for completion of ongoing housing projects that are not classified as non-performing assets (NPAs) or are facing bankruptcy proceedings under NCLT.Private and public investors such as Life Insurance Corporation of India, banks, sovereign funds, and development finance institutions would also contribute an equal amount to the fund that would be managed by professionals from the housing and banking sectors help finish 350,000 units in the affordable segment.  They claim that  60 per cent of such dwellings are  complete but could not be  completed due to funds crunch. The corpus will, however, not be utilized to finish projects that have been sent to the National Company Law Tribunal (NCLT) or have been declared as non-performing assets (NPA), FM Sitharam added.The Business Standard  said  some  major players  like Signature Global, Omaxe, Mahagun Group, and ABA Corp welcomed the measures but not everyone was happy. Some said these may not be enough to get the sector out of the mess. “The criteria for availing the proposed fund beat ground reality,” said Manoj Gaur, managing director, Gaur Group. “Projects stuck because of the funds crunch have been left out.”Gaur, who is also chairman of the affordable housing committee, Confederation of Real Estate Developers Association of India, said, “Projects that are 60 per cent complete may not find it too difficult to find funding despite defaulting on loan repayment. “He added that since most large projects were already in the NCLT or had been declared NPA, the scheme did not really address the problem.“These moves are welcome, but the government could have done more in terms of liquidity and restructuring of loans. Interest rates should have been cut and the rate of goods and services tax should have been brought down at all levels,” said J C Sharma, vice-chairman, Sobha.Anuj Puri, chairman, Anarock Property Consultants, said excluding projects that were in the NCLT or had been declared NPA left many homebuyers out.FM Sitharaman made a few other announcements. To bring in more capital, the external commercial borrowing norms will be relaxed for affordable home developers after consultation with the Reserve Bank of India. Government employees will also get loans at cheaper rates to build houses. Industry players, however, said similar measures were needed for private sector employees, who were the bigger consumer base.“The fund is for projects in the affordable and mid- segment  housing only. Homebuyers in the luxury segment have to wait longer,” said Anarock’s Puri, adding: “There is no clarity on the price of mid-segment homes to be included. Nevertheless, this special window of funds will give many developers an opportunity to complete their stalled projects”, he added.(with The Business Standard inputs)