The Confederation of Real Estate Developers’ Association of India is seeking special package from the government to deal with the losses arising in the wake of ongoing shutdown against Coronavirus.
As per the industry body, the real estate sector contributes to 10% of the national GDP and is the 2nd largest employer in the country. It has asked for the interest rate on all real estate project loans to be re-fixed at the repo rate on which banks borrow from RBI.
Additionally, it has asked the government to put off the principal repayments for real estate projects falling due over the next three months and recovered in installments over the ensuing 12 months.
“The real estate industry is directly impacted as customers have no means to meet their obligations against home purchases. Malls, multiplexes, restaurants, clubs, etc. are lying deserted all over the country with imminent default in their rent payments. When the real estate industry does not receive its payments from the customers, there is no way it can honour its obligations of interest and principal or meet the deadline to the customer as regards delivery,” it said.
It has urged the central government to declare COVID-19 as ‘force majeure’ under Section 6 of RERA and increase the project completion time and exemption from penal charges by a year.
“As cash flows are affected because buyers cannot fulfill commitments due to the financial meltdown, additional funds from financial institutions are needed to meet increased costs on the same terms as existing loans and without additional collaterals,” said CREDAI.
CREDAI also said that Rs. 1 lakh crore is lying in BOCW Cess Fund collected from developers. It should be used to provide a loss of wages and healthcare benefits to construction workers.
CREDAI is the apex body for private real estate developers in India, representing over 20,000 developers through 21 states and 220 city chapters across the country.
News Source: Economic Times, Url: https://bit.ly/398TX3y