The government on Sunday said it will soon address issues affecting the real estate sector after industry bodies and homebuyers met Finance Minister Nirmala Sitharaman to flag their concerns regarding liquidity crunch, demand slowdown and stalled projects.
The finance minister on Sunday held two separate meetings -- the first with the two apex realtors' industry bodies CREDAI and NAREDCO, and the second with homebuyer associations, to discuss the issues concerning the real estate sector and steps to be taken to strengthen the industry.
Housing and Urban Affairs Minister Hardeep Singh Puri, Minister of State for Finance Anurag Thakur and top officials from the departments of economic affairs, revenue, housing, CBDT, corporate affairs and RERA were also present in the meetings.
According to sources, representatives of CREDAI and NAREDCO said that there is "unrest" in the sector because of liquidity crunch and poor sales, and demanded that banks and NBFCs should be encouraged to fund projects.
They also expressed concern that the situation could worsen during the coming festive season when generally demand is higher.
There would be a separate high level meeting, under the chairmanship of the cabinet secretary, in next few weeks to discuss setting up of a stress fund to deal with stalled projects and bail out lakhs of stuck homebuyers, sources added.
Briefing the media after the meeting, Puri said: "Lot of useful discussions happened at the meeting with the real estate industry. We looked at a number of issues, clarified a number of issues and the government will be addressing these issues in the days to come."
With these discussions, he said, the process of finding solutions to some of the problems that have affected the real estate industry has started.
The finance ministry also tweeted about the two meetings -- one with the representatives of the real estate sector and the other with homebuyers.
The ministry had last week held meetings with the financial market representatives, foreign portfolio investors and industry chambers, amid concerns over economic slowdown and the latest Union Budget proposals.
"Whatever problems are there of the homebuyers, stalled projects etc we are exploring ways to move forward on this. Many homebuyers have moved the Supreme Court and there are judgements too. So it's a very complicated arena. But given the goodwill within the government, amongst the homebuyers and industry, so whatever problems are there we will find solutions for them," Puri asserted.
When asked about creation of a stress fund, he said a number of issues were discussed, but declined to give details.
CREDAI Chairman Jaxay Shah said, "We had a great positive, patient hearing from finance minister. Government is cognisant about the matter affecting real estate industry including the liquidity crunch and taxation issues. We are very hopeful to have some good and tangible results in coming weeks."
CREDAI President Satish Magar said the government wanted to know about all the issues affecting the industry.
NAREDCO President Niranjan Hiranandani said: "As you know, the real estate industry is going through a crisis, as is rest of the whole economy. So we are very glad that the finance minister and housing minister met us on a Sunday morning to understand the situation."
"The positive part is that the government understood that we need to take this thing forward and we need to do it quickly," he said.
Asked about the government's response, Hiranandani said, "No response in terms of what actions the government wants to take, we are not aware and nor was anything committed on behalf of the government."
NAREDCO Vice Chairman Parveen Jain said the issue of stalled projects in the NCR region was also discussed.
To boost demand and address liquidity issues, the industry bodies suggested various measures, including reduction of interest rates on home loans to 7 per cent and withdrawal of the recent NHB circular prohibiting subvention scheme (where the interest is paid by the developer for certain fixed time).
They also said the real estate regulators established under RERA should be the first point of grievance redressal for homebuyers.
Meanwhile, homebuyers body Forum for Peoples' Collective Efforts (FPCE) President Abhay Upadhyay said 5 lakh customers are stuck across the country due to delayed projects.
He demanded creation of a Rs 10,000 crore stress fund to complete such projects and provide relief to these homebuyers.
Homebuyers of Jaypee Group told the finance minister that projects are not getting completed despite promoters having huge land bank and other assets like the Yamuna Expressway project.