Govt to explore more financing options for stalled projects: Puri

The Government would ask other financial institutions to open up financing avenues on the lines of SWAMIH Fund to provide priority debt financing for completion of stalled housing projects, said Hardeep Singh Puri Minister of State (Independent Charge) of the Ministry of Housing and Urban Affairs.

The minister said this in his valedictory address at the third day of the virtual ‘Real Estate and Infrastructure Investors’ Summit (REIIS)-2020’. The summit was jointly organised by Naredco and Asia Pacific Real Estate Association (APREA), along with knowledge partner ANAROCK, with the theme ‘India – Opportunities in the Coming Year’.

He said his ministry will soon consider classifying the real estate sector as a different asset class to give it a further boost. “There was a proposal that the real estate needed a different asset class. Please send a note and we will push this forward,” he said.

Puri also promised that his ministry would interact with the Finance Ministry to rationalise the circle rates further and explore the possibility of enhancing the FSI limits to pump in more housing inventory in the market.

Addressing the concern of the developers in Mumbai that the pending environment clearances were delaying completion of projects in the city, the minister urged the Maharashtra Government to set up a committee in this regard to resolve the issue.

The minister also hinted that the Government would encourage other states to reduce stamp duty for boosting the housing sales. He also suggested the developers to offload inventory in real time for a fast-track growth.

Renu Sud Karnard, Managing Director, HDFC Limited, pressed for the need to classify the real estate sector as a different asset class and pointed, “The Central and state Government’s reforms like liquidity infusion and stamp duty reduction have revived the demand. We need more reforms such as increasing the FSI, review of ECLGS-2 schemes for housing finance companies to keep up the momentum.”

Rajeev Talwar, National Chairman, Naredco, urged the minister to consider FDI flows into the affordable housing segment and expected further tax reliefs on home loans to give a boost to housing construction.

Niranjan Hiranandani, National President, Naredco, said, “We need a housing revolution to bring the real estate sector on a growth mode. The reforms the Government has started to support the real estate sector shall continue to make urban living sustainable.”

Ashok Mohanani, President, Naredco West, said, “The real estate sector is thriving back and set to garner about $8 billion investment this year. For overall growth of the sector, we urge that the risk weightage of the sector should be reduced further by making the first charge of the SWAMIH Fund pari pasu.”

Rajan Bandelkar, Vice-Chairman, Naredco West, said, “With the support of the Government and the financial institutions, the real estate sector would soon be able to bridge the liquidity deficit and deliver the bankable projects. The foreign funding will increase significantly across asset-classes in the next year.”

Sigrid Zialcita, CEO, Asia Pacific Real Estate Association (APREA), said, “The volumes in the real estate are increasing due to effective measures such as stamp duty reduction, rationalisation of GST and other reforms. A further rationalisation of GST and the initiatives like stamp duty reduction will help to attract more investments.”

Sandeep Runwal, President-Elect, Naredco Maharashtra, expressed the need for quicker environment approvals for speedy implementation of housing projects.

During the day’s sessions, eminent speakers analysed the funding environment of the real Naredcoestate sector. In the session, ‘Financing and Restructuring of Loans’, C. Sreenivasulu Setty, Managing Director, State Bank of India, advocated the need for the real estate sector to corporatise the businesses to fulfill the criteria of the prospective buyers.