National Real Estate Development Council (NAREDCO) has sought a relief package to mitigate the economic impact of COVID-19 pandemic. The industry body has also urged government to partially lift lockdown at construction sites to avoid delays in completion of projects and minimise job losses.
"The Covid-19 pandemic has paused the real estate sector while disrupting the businesses across the nation. While the RBI and the Finance Minister have taken several measures to ease the load on consumers' shoulder, real estate collectively grapples with the impact of the pandemic," NAREDCO said in a statement.
NAREDCO said that real estate, which contributes 7 per cent of the country's gross domestic product (GDP) and employs over 11 per cent of population, has been under stress for the last few years due to economic slowdown. The situation is likely to worsen due to coronavirus outbreak, it said. Considering the rising unsold inventories and delay in delivery of projects, it is imperative to prevent loss of jobs, it said.
"Since real estate accounts for 6-7 per cent of India's GDP and employs nearly 10-11 per cent of population, we urge the government to focus on the demand of the developers," the statement said.
In order to keep up with the world economy, the industry body has called for suspension of all NCLT activities for next 6 months to provide a breathing space to companies who have faced losses due to falling stock prices.
Decreasing stock prices has made "high net worth companies prone to be taken over by foreign investors, the results of which can be devastating for India," it added.
NAREDCO Chairman Rajeev Talwar, said, "During these unprecedented times, a unity amongst the people is visible to tackle COVID 19. We urge the government to provide us with a stimulus package to deal with the current situation while we take care of our labor force to ensure that their health and safety is not compromised."
Niranjan Hiranandani, National President, NAREDCO said, "Country's economy is under tremendous pressure owing to exponential losses across sectors. Real estate has been under consistent stress with rising unsold inventories, liquidity crunch and now with COVID-19. As a body we urge the government to come up with an economic relief package keeping in mind the current status of the real estate."
In a bid to prevent the spread of coronavirus, Prime Minister Narendra Modi has order complete lockdown for 21 days, from March 25 to April 14. This has resulted in shutdown of works at construction sites across the country, forcing migrant labourers to return back to villages. The government has announced financial aid to unorganised construction workers who are likely to be severely affected by the lockdown. The Ministry of Labour has said that it would utilise the cess fund of Rs 52,000 crore to provide relief to the construction workers through direct benefit transfer (DBT).
By Chitranjan Kumar with agencies inputs