Real Estate Industry applauds FM’s move to extend RERA deadline for projects
In a relief to real estate industry, Finance Minister Nirmala Sitharaman on Wednesday announced that the deadline for completion of projects will be extended by up to six months for all registered projects expiring on or after March 25, 2020, without individual applications, treating the coronavirus outbreak as an event of ‘force majeure’.
Dr. Niranjan Hiranandani, President, ASSOCHAM and NAREDCO
The first part of the financial stimulus measures announced by the union Finance minister would help in providing liquidity, prevent several small businesses from total closure and save hundreds of jobs.
The first tranche announced today of the Rs 20 lakh crore package will revive demand back in the economy. These steps announced today will ensure the continuation of smaller enterprises in the market by giving them funds to run the business. With announcements like Rs 3 lakh crores collateral-free automatic loans for businesses, Rs 20,000 crores subordinate debt for stressed MSMEs and a Rs 50,000 crore equity infusion for MSMEs through fund of funds will pull the MSME sector from financial doldrums.
These measures would also help the companies to resume options needed to revive the economy. A lot of companies want to shift their operations to countries that are better prepared. India is one of the few countries that fit the bill. These measures would help get additional investments in the country.
The liquidity measures like the Rs 30,000 crore special liquidity scheme made in both primary and secondary market transactions in investment-grade debt papers of NBFCs/HFCs/MFIs will help in providing funding to the real estate sector.
Also, the six-month extension for RERA registered projects expiring on or after 25th March 2020 will also benefit several developers in a scenario where construction work has come to a complete standstill. This would also prevent them from defaulting on their timelines.
These measures which are a part of the Atmanirbhar Bharat Abhiyan or the self- reliant India campaign would boost investments in ‘Make in India’ Projects post COVID 19 scenario.
Rohit Poddar, Managing Director, Poddar Housing and Development Ltd. and Joint Secretary, NAREDCO Maharashtra
The announcement of the overall 20 Lakh Cr package is much-awaited news which will stimulate progression sectors across the country. With an aim to encourage MSME’s to get them listed on main board of stock exchange; 50,000CR equity is infused which will help them in tackling the shortage of funds. The supply of Special Liquidity Scheme for NBFCs/HFC/MFIs along with Rs 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs will provide liquidity support and create confidence in the market. Extensions of 6 months for real estate projects will de-stress real estate developers and ensure completion of projects so that homebuyers are able to get delivery of their booked houses with new timelines.
Overall, this announcement will benefit the businesses across the country to uplift the growth of their business and ensuring immediate liquidity required for staring economic engines, post lockdown.
JC Sharma, Vice Chairman & Managing Director, SOBHA Limited
Today the hon’ble Finance Minister, Nirmala Sitharaman has delineated the first tranche of Rs. 20 lakh crore package. Our FM presented a comprehensive vision to make India a self-reliant nation by focusing on MSME’s, construction, real estate, NBFC’s and Micro Finance. We welcome these laudable steps by the government towards the most crucial sectors that contribute significantly to the growth and employment of the economy.
In support of the real estate sector, an announcement on extension of registration and completion dates of projects suo-moto by 6 months of all registered projects, expiring on are after 25 March, 2020 without individual application is very thoughtful. Further, the Ministry of Housing and Urban Affairs will advise States/UTs and their Regulatory Authorities to treat COVID-19 as an event of ‘Force Majeure’ under RERA. The regulatory authorities can extend this as required for 3 months and a fresh “Project Registration Certificate” can be issued with revised timelines. The extension for various statutory compliance under RERA will further aid in providing ease to developers and buyers. Additional support of one-year extension has been provided by the government for loans by NBFCs to commercial real estate sector from the date for commencement for commercial operations (DCCO) will spur the growth and de-stress the sector. All these steps will ease the current situation, preserve financial stability and assure the homebuyers of delivery of their booked houses with revised timelines. While this was the first addressal in a line of series by Nirmala Sitharaman, we look forward to further announcements that will address the woes of the sector and economy.
Manoj Gaur, MD, Gaurs Group and Chairman Affordable Housing Committee CREDAI National
Ever since the imposition of lockdown economic activities undertook a hit and construction activities also got stalled across the country. Some construction work has now resumed, but faced with the migration of labourers, it may take some time for it to gather full steam. In this context, the six-month extension in the completion deadline is a welcome move.
Himanshu Chaturvedi, Chief Strategy Officer, Tata Projects Ltd
The Government’s Atmanirbhar Bharat initiative has recognised “Infrastructure” as one of the five pillars. This is an acknowledgement of the sector’s key role in India’s development and large scale employment generation. The extension of up to six months to be given by GoI Agencies is a welcome move since many projects across the nation were affected due to the sudden disruption caused by the pandemic – much of this such as lockdown was beyond the control of contractors. The move to allow government agencies to partially release bank guarantees to the extent of completed contract will definitely improve the industry’s cash flow situation, especially in case of smaller and mid-sized contractors.
The measures for MSMEs such as revised definition or classification, collateral-free automatic loans, subordinate debt-based scheme and equity support will provide an impetus. It must be remembered that many such MSMEs supply various construction material to the infrastructure sector. A strong MSMEs sector is important to the infrastructure sector and overall national economy.
Pradeep Aggarwal, Founder & Chairman –Signature Global Group & Chairman – ASSOCHAM National Council on Real Estate, Housing and Urban Development
The relief provided to the common man under EPF will help the affordable segment a great deal. The buyers of affordable fall in this category and they will be elated to get extra money at their disposal. Covid-19 situation has made everyone realise the importance of making safe investments and having a roof on one’s head. With extra disposable income, these beneficiaries of the announcement made by the FM will go for buying real estate assets.
Other announcements regarding extending the timelines under RERA authority will help a great deal in providing relief as buyers will understand the reason behind delivery date extension.
Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani
The bold economic measures announced today display the government’s strong commitment to tackle the unprecedented challenges and restore confidence and faith in the economy. Providing an extension for completion of projects and treating the coronavirus outbreak as an event of ‘force majeure’ under RERA, brings a major relief for the sector that has been the backbone of the economy. During the lockdown, the construction industry has nearly come to a standstill thus negating the green shoots that had just begun appearing prior the pandemic came to the fore. In order to tackle the subdued demand from home buyers during and post COVID-19, reduction in interest rates on home loans will encourage fence-sitters to act quickly to invest in a property.
Government measures towards improving liquidity and providing a boost to the MSME sector is also commendable. The Special Liquidity Scheme of Rs 30000 crore for non-banking financial companies, microfinance companies and housing finance companies will bring in liquidity in the market. The various economic measures announced by the government during COVID have given a powerful booster dose to revive the Indian economy. The resolution to remain self-reliant coupled with revolutionary reforms will surely lead the country on a high growth trajectory.
Deepak Kapoor, Director, Gulshan
Developers are dedicated towards fulfilling the promises made to the buyers. The realtor community has been focussing on delivery over last one year but this global pandemic was about to derail it. The Government has intervened at the right time and gave developers space to breath as they were also facing the problems which are faced by other industries or sectors.
Amit Modi, President Elect CREDAI Western UP
Even though the extention the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual will help the developers from going into default for sometime, but we still feel that specific steps required for liquidity generation in the Real Estate Sector is the real need of the hour.
There is nearly Rs 7.8 Lakh Crore with the banks at the present moment, that has been parked with the RBI at moment and it’s high time that, that amount is moved from the RBI and Banks to percolate liquidity in the economy.
Uddhav Poddar, MD, Bhumika Group
“We welcome the announcements made by Hon’ble PM and FM, and hope for the speedy implementation of all of these as the economy is already in the ICU state. Real estate is one of the largest employment generators, employing a large part of migrant labour population of the country welcomes the reliefs pertaining to extension of project completion deadlines, but the main concern today is of liquidity and for that there needs to be a direct push to banks and NBFC’s to lend to this sector. Overall very positive but quick implementation would be the key”.
Rajat Goel, JMD, MRG World
The recent announcements made by FM Nirmala Sitharaman under the Self- Reliant India Movement have eased the developments for the real estate sector in coming months. It has treated COVID-19 as an event of ‘Force Majeure’ under RERA, along with extension of registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without any individual applications from the developers. The liberty of extending it by another 3 months is also given to regulatory authorities. We welcome the government’s measure for understanding our position in this difficult time and helping us maintain positive relations with our customers. Post- COVID scenario has been eased out for us, and we would be looking forward to complete our projects under this new timeline, with due support from RERA and Urban Ministry authorities.
Prateek Mittal, Executive Director, Sushma Group
We welcome the measures undertaken by the government to support real estate sector amidst the ongoing crisis. With the infusion of Rs 30,000 crore to the NBFCs, liquidity crunch in the housing finance will be eased off to an extent. Apart from that, now the RERA authorities will be directed towards treating COVID-19 as an event of ‘Force Majeure’. This announcement has brought some relief to the developers from additional stress due to pandemic covid19.
Yash Miglani, MD, Migsun Group
The sector has been requesting government for measures that can help maintain the good image of real estate that has emerged especially after this government came with RERA. The latest ‘Act of God’ would have wiped out all the positive efforts made by the developers towards streamlining. In this backdrop, the announcements made by the FM will help the sector save its hard-earned image.
Harvinder Singh Sikka, MD, Sikka Group
COVID-19 has been a clarion call globally. We are very thankful for Govt. of India’s proactive support to the real estate industry. Declaration of COVID-19 as an ‘act of God’ under regulatory authorities, pushing the dates of registration and completion suo-moto by another 6 months for the projects expiring on and after 25th March,2020 will prevent the developers from entering into defaulting. Even post-lockdown, the procurement of raw materials and the presence of labour in full force will be certain setbacks leading to delay in work at construction sites. An extended timeline will provide an opportunity for developers and contractors for planning out the way forward upon understanding these situations closely.
Vijay Verma, CEO, Sunworld Group
Real estate sector has always been in a hustle of delivering projects within registered timelines, procuring timely approvals from authorities and departments. The lockdown bringing every sector to standstill added to the miseries of the property market. We are grateful for the government’s intervention with reduced repo rates, resuming of construction activities, the recent announcements of extended timelines for registered projects and an additional extension of 3 months for projects by RERA. They will be distressing the developers and providing assurance to the homebuyers for timely deliveries. A foresighted approach for issuing fresh ‘Project Registration Certificates’ automatically with revised timelines, reflects hope for a promising future
Bhairav Dalal, Partner and Leader Real Estate Tax, PwC India.
Invoking the Force Majeure clause for delays in project implementation is certainly a right first step. The industry is clearly looking for much more, especially on the fiscal side. The current biggest challenge for the industry is liquidity and some clear measures are needed to address the same.
Alok Saraf, Associate Partner, Grant Thornton Advisory Pvt Ltd
The provision of Suo Moto extension of due dates under RERA will definitely benefit developers whose projects were due for completion during the lockdown. The real estate sector continues to be hopeful for a credit guarantee scheme similar to the one being provided to the MSME sector announced by our honorable FM.
Kamal Khetan, Chairman and Managing Director, Sunteck Realty Ltd
The Government has packed much punch in the “Atma Nirbhar Bharat” package, aimed at boosting Economy, Infrastructure, Technology, Demography and Demand. We also appreciate the attention to basics like land, labour, liquidity and law where key structural reforms are expected, paving the nation’s way to a global manufacturing powerhouse. Specifically to real estate, we believe that the attempt to infuse more liquidity as well as to extend a helping hand to the struggling projects by relaxing RERA deadlines is very timely and appropriate.
Arvind Subramanian, CEO, Mahindra Happinest
Good quality and affordable housing is both a basic human need and a public health enabler as we have seen in the patterns of spread of COVID-19. The government’s #AtmaNirbharBharat initiative is visionary and brings to the fore the social and economic significance of India’s real estate sector. The easing of RERA provisions, especially the six-month extension, will help real estate developers better plan operations and ease the disruption caused by the pandemic. This is important since social distancing measures and the restriction of movement at construction sites is expected to impact project timelines.
The Rs. 30,000 crore Special Liquidity Scheme for NBFCs and HFCs is also a welcome move. It will ensure banks and NBFCs can continue funding housing projects for developers and mortgages for homebuyers.
Ravi Saund, Founder- Director, Emperium Realty Pvt Ltd
Considering a large part of the country is still a red zone and the ongoing shortage of labour, the extension of completion timelines under RERA is a big relief to the under-construction projects that were at the risk of defaulting RERA timelines. The decision to infuse Rs 30,000 crores into NBFCs, MFIs and HFCs may encourage these prime lenders to look at the sector positively. In the days to come, I am hoping there will be an ensuing announcement that will address the liquidity issue faced by developers. The need of the hour is to create an environment that will generate demand and thus revive the sector.