Sharad Pawar seeks PM Narendra Modi's intervention to revive real estate sector

Updated: May 29, 2020, 07:26 IST | A correspondent | Mumbai

NCP chief writes to PM Narendra Modi on real estate sector's 'complete breakdown'; CREDAI-MCHI chief says the industry has collapsed

Sharad Pawar
Sharad Pawar

NCP chief Sharad Pawar has written to Prime Minister Narendra Modi saying that the real estate sector is in a state of "complete breakdown" amid the lockdown and Modi should look into the issue personally.

In the letter dated May 27, Pawar demanded that the prime minister undertake measures to revive the sector which has been hit hard.

"Amidst unprecedented pandemic COVID-19 and consequent nationwide lockdown, the Real Estate Sector is in a state of complete breakdown," Pawar said in the letter,
which he shared on Twitter on Thursday.

The massive "outflux" of labourers, stoppage of work and sales for almost three months, stagnant demand and impaired economic activities have taken a toll on this industry "which contributes substantially to the national GDP", he said.

The Confederation of Real Estate Developers Association of India (CREDAI) too has written an open letter to Modi about the crisis and requested his immediate intervention, the former Union minister noted.

CREDAI has made a few recommendations such as one-time (loan) restructuring, additional institutional funding, waiver of penal interest, policy innovations for triggering consumer demand, controlling cartelisation of raw material, changing criterion of affordability for GST applicability and operationalisation of SWAMIH fund to help the sector, he said.

The Special Window for Completion of Construction of Affordable and Mid-Income Housing (SWAMIH) fund was created by the government with contributions from financial institutions such as LIC and SBI to complete over 1,600 stalled projects with 4.5 lakh housing units. "I shall be grateful if you personally look into the matter and initiate necessary measures for revival of one of the most important sectors of economy i.e. the Real Estate Sector," Pawar said in the letter.

Nayan Shah, president, CREDAI—MCHI (the Maharashtra Chamber of Housing Industry) said that the real estate industry had collapsed and the government needed to take immediate steps to ensure healthy demand and supply exists in the market. The industry is thankful to NCP chief Sharad Pawar for raising the concerns of the industry with Prime Minister Narendra Modi.

"Banks should be told to go for one-time restructuring of loans given to developers. Also, home loans should be reduced to 5 per cent levels so that this attractive rates of loans brings buyers to the table which will directly create demand and help economy too as more the housing units are sold bigger the tax collection would be for the government," Shah added.

He further claimed that despite repo rate being reduced by nearly 3 per cent, many banks have not reduced the home loans by even 1 per cent.

"This gap needs to be bridged or else the entire purpose of the system to reduce rates so that industry sustains the current economic crisis will be a futile exercise," Shah quipped.

The industry veteran further cited that demands furnished by them should be easily accepted by the government as most of them are not going to add any financial burden on the government kitty. "In fact, accepting demands will bring more revenue to the government as higher housing sales will enhance tax collections," Shah said.

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