News: Realtors’ body asks PM for urgent relief-26-05-2020
Updated On: May 26, 2020
Realtors’ body asks PM for urgent relief
The association, which has some 15,000 developer members, has sought one-time debt restructuring, lower interest rate on home loans and tax sops to boost liquidity and demand.
NEW DELHI: Realtors’ apex body Credai has written to Prime Minister Narendra Modi, seeking immediate relief measures to tide over the Covid-19 crisis. The association, which has some 15,000 developer members, has sought one-time debt restructuring, lower interest rate on home loans and tax sops to boost liquidity and demand. In an open letter, the Confederation of Real Estate Developers’ Associations of India (Credai) saidthe sector contributes substantially to GDP and has linkages with almost 250 industries. “Our survival, therefore, is not just desirable, it is rather crucial for the economy.” Liquidity crunch, stagnant demand and cartelisation of raw materials are major impediments for the industry to kickstart, it added. Credai made seven recommendations to revive the sector and sought immediate intervention from Modi. Saying the situation is “much worse” than 2008, Credai said “a one-time restructuring scheme as was permitted by RBI in 2008 may be quickly instituted by lending institutions.” Since real estate was already reeling under a cyclical downturn before Covid-19, debt restructuring needs to be allowed for all accounts which were standard as on December 31, 2019, it added. Credai demanded that banks, non-banking financial companies (NBFCs) and housing finance companies (HFCs) should be directed to provide additional credit equal to 20% of the existing real estate project related advances with no additional security and without the classification of project as NPA. The penal interest charged by banks and financial institutions should be suspended for one year or till the pandemic abates. To revive housing demand, Credai suggested that “government should reduce the maximum rate of interest on new home loans to 5% by subsidising the interest component of EMIs for next five years.” The limit of principal deduction on housing loan under Section 80C should be increased to ₹2.5 lakh. Interest deduction under Section 24 on housing loan for homebuyers may be increased to ₹10 lakh, it said. There should be no capital gains for residential properties held for longer than one year and the subvention scheme should be allowed again.
