#ReviveRealEstate - ReviveEconomy

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Hon’ble Pradhan Mantri ji:

We salute you for your firm leadership in these difficult times – in fact the most difficult since the Independence.

Sir, your leadership and timely firm decisions have helped India contain the spread of COVID-19, give befitting response to Chinese aggression and maintain harmony in the country.

But sir, as you will appreciate the series of lockdowns necessitated by COVID have stalled the economy and the RBI itself has forecast a negative growth.

It is in this context that we at CREDAI, the national body of real estate developers, have been drawing your attention on the need to revive real estate to revive the economy and thus positive GDP growth.

The sector supports 250 to 300 industries with a potential to create 6 crore jobs.

India is consumption-driven economy and unlocking real estate will surely unlock consumption that has been at a standstill due to the lockdowns. Restoring consumer confidence should be the most important goal for the nation today.

Sir, hats off to you, the Unlock 1.0 has begun and is its showing effects, though slowly.

The avalanche of job losses have shattered the dreams of many – the dream of leading a peaceful comfortable lifestyle to owning a dream house.

Sir, for an average Indian, buying a house is the lifetime costliest investment. We think several times on all pros and cons before purchasing real estate property.

Hence, it is imperative that the consumer confidence is rebuilt.

We suggest the following simple, workable steps:

·       Ensure that the benefits of repo rate cuts by RBI are passed on to the end consumer at all levels.

·       Empower the home buyer with reduced, comfortable rate of interest of 5%. Or at least have the rate subsidised for low and mid-income groups for the next five years.

·       Increase the limit of principal deduction on housing loan under Section 80C to Rs 2.5 Lakhs.

·       Increase Interest deduction under Section 24 on housing loan for homebuyers to Rs. 10 lakhs.

·       Scrap the capital gains tax for residential properties held for a period of longer than one year to allow them time to reinvest after serious thought.

·       Allow buyers to pay only margin money with no EMI for 24 months. (For this, RBI may allow HFCs a 24 months subvention scheme to homebuyers from developers. This could be adjusted by extending the loan tenure by 24 months with subvention amount to be recovered in the last 2 months.)

·       Fix realistic Ready Reckoner/Circle rates realistic as in most cities and areas these are either equivalent or more than the market rates. This will facilitate rationalisation of Stamp Duty and Registration and the government will benefit due to the high volumes the consumption will generate.

·       Change the definition of affordable housing to Rs 75 lakhs to allow GST of 1% as the current level of Rs 45 lakhs is too low in many cities due to the high cost of construction.

·       Change in bankers’ negative mind-set for real estate. Even the fresh circulars by banks give negative treatment for real estate (other than media, entertainment etc.,).

·       Empathise with people losing jobs or suffering pay-cuts. Banks are harassing borrowers to resubmit their proofs of income with a view to reassessing their eligibility and add to their unmitigated tensions.

 

For developers:

Sir, we are not asking for the moon nor are we seeking any waivers

·       Allow us just one-time debt reconstruction for developers to help complete projects on hand, clear inventory without any pain.

·       Ensure the Banks and NBFCs pass on the repo rate cut benefits to be passed on to realty developers, too.

·       Grant MSME status and benefits for the Real Estate industry so that we developer community too can breathe. This will help improve consumer confidence in more than 300 ways – real estate developer consumes material from 300 industries and the houses is purchased by the people at large.

 

Looking forward to your kind intervention to resolve these issues.

Thanks and regards

AJAY ASHAR

Spokesperson – CREDAI Action Committee