Real estate developers in Gautam Budh Nagar have welcomed the Centre’s relief package to revive economy amid the Covid-19 crisis and said that it will impact the realty sector positively. One of the decisions that will benefit in the long term is that now corporate insolvency and bankruptcy proceedings will not be initiated against any company, including real estate ones, for the next one year, they said.
In the district, there are a number of developers facing corporate insolvency. Many other realtors, who have failed to finish and deliver the flats to homebuyers, were on the verge of facing insolvency proceedings. But after the recent announcement of the Union ministry of finance, they will not face any legal proceedings for the next one year.
In corporate insolvency, homebuyers have failed to get any justice in the past, said the developers, adding that builders will not be put into defaulters’ category if they defaulted on loans due to the Covid-19 pandemic.
“The extension of project completion date by six months for housing projects, allocation of Rs 75,000 crore for non- banking finance companies and housing finance companies, reduction in TDS by 25% and other measures would help stimulate demand and improve liquidity in the real estate sector to a great extent. Although the relief as sought by the realty sector has not been addressed, the stimulus has something to offer for the industry. But the government must allow one year additional time to finish and deliver delayed projects. We hope it will be done soon,” said RK Arora, Uttar Pradesh president for National Real Estate Development Council (NAREDCO), a builders’ group.
The district has at least 600 ongoing realty projects and the builders hope that after the Centre, the UP government will also make positive announcements to revive the sector.
Following instructions from the UP government, on Friday, the Noida authority officials held a meeting in Sector 6 administrative building with the developers on the measures to revive the sector. The meeting was held after the UP industry minister assured of help to the builders.
“We are brainstorming on the demands made by the developers and soon the government will take final decisions on their issues,” said Satish Mahana, UP industry minister.
Experts hope that recent announcements made by the Centre will create a positive sentiment in the real estate sector.
“The ministry of finance announced that any debt incurred during Covid-19 for a company will be excluded from the default category under Indian Bankruptcy Code. Additionally, the ministry announced that no fresh insolvency will be initiated for one year, so impacted businesses can focus on survival and recovery for this period. This measure, along with previously announced sops such as extension of loan moratoriums and project completion deadlines can come to the rescue of small developers who are particularly impacted by the funding crunch and low sales,” said Prashant Thakur, director and head (research), Anarock Property Consultants.
Dr Harish Sharma, executive director of Rudrabhishek Enterprises Limited, an urban development & infrastructure consultant, said that the relief package announced by the government will not only give a big push to the economy but will also infuse the positivity among the businesses in the country.
“The first tranche provided the much needed liquidity support to the MSMEs and a breather to the real estate sector, the second trance while focusing on migrant workers, street vendors and farmers provided an impetus to the housing sector by extending CLSS and promising affordable rental accommodation to migrants and urban poor,” Sharma said.
(Source: Hindustan Times)