Thanking Prime Minister Narendra Modi for his government’s support to the real estate industry to overcome the COVID-triggered crisis, developers have appealed to him to “move a step further” to empower the consumer to help revive the economy and the job market.
“Reduction of home loan interest to 5 per cent and raising the limit for affordable housing to Rs 75 lakh to avail of 1 per cent GST, realistic ready reckoner rates and EMI waiver for 24 months for buyers are among few workable steps the government could take to help revive the buyer sentiment,” said Ajay Ashar, spokesperson of the CREDAI Action Committee. The Committee, formed by the developers’ apex body, has floated an online petition addressed to the Prime Minister, the Finance Minister and the RBI seeing immediate attention to the realty industry issues
Indian economy is consumption driven and resumption of purchase of houses will rekindle the real estate which in turn reboot about 300 industries with its positive effect and lead to generation of more than five crore jobs across the country, said Ashar in the petition that attracted about 38,000 signatures.
Earlier, stressing that the homebuyers’ interests will be protected in view of the delays in completion of projects arising out of the COVID-triggered lockdowns, the Prime Minister’s Office (PMO) has assured a city-based NGO Samachar Foundation that the issues faced by the developer community will also be looked into.
Responding to a direct petition by a the Foundation seeking the Prime Minister’s intervention into the real estate crisis, the PMO explained that the government has taken several measures “to ensure that projects do not get stalled due to disruptions caused by Covid19 pandemic and flats and homes get delivered to the homebuyers albeit with some delay.” The PMO has assured that the issues faced by the developer community will also be looked into.
Regarding the plea to look into demands from the real estate industry for one-time debt restructuring, reduction of home loan interest rate to 5 per cent, GST input tax credit, the PMO letter, signed by Deputy Secretary Akhil Saxena, told the petitioner that “your valuable suggestions have been noted and appropriate action will be taken.”
Ashar pointed out that the banks and NBFCs are yet to pass on the benefits of repo rate reduction to the end user and this is a big impediment for both the home buyer and developer. CREDAI Action committee has also suggested to the government to increase the limit of principal deduction on housing loan under Section 80C to Rs 2.5 Lakhs raise interest deduction under Section 24 on housing loan for homebuyers to Rs 10 lakhs and scrapping of the capital gains tax for residential properties held for a period of longer than one year to allow them time to reinvest after serious thought.
CREDAI Action Committee also wants a scheme whereby a homebuyer would need to pay only margin money with no EMI for 24 months will address this insecurity. “Hence, RBI may allow HFCs a 24 months subvention scheme to homebuyers from developers. This 24 months’ subvention be adjusted by extending the loan tenure by 24 months with subvention amount recovered in the last 2 months,” said Shailesh Puranik, Joint Secretary, CREDAI Action Committee.
Pointing out that the Ready Reckoner or circle rates are unrealistic and even more than the prevailing market prices, the Action Committee called for rationalisation of these rates. Ready Reckoner or circle rates are fixed by various State Governments to form a basis for levying stamp duty and the reduction will benefit the governments due to the high volumes the consumption will generate.