Government May Announce Relief Package For Real Estate Sector This Week: Report

Government May Announce Relief Package For Real Estate Sector This Week: Report
NEW DELHI: After a number of measures announced by Finance Minister Nirmala Sitharaman last week to deal with the economic slowdown and then RBI surplus’ transfer on Monday, the government will announce a relief package for the real estate sector, under which a stress fund could be set up to help complete unfinished projects.

The announcement is expected this week.

Sources said liquidity problems and completion of stalled projects formed the core agenda of the meeting here on Sunday between Finance Minister Nirmala Sitharaman and real estate players which discussed ways to create demand in the country’s realty market.

Last Friday, she said the government would come up with “solutions” for stalled housing projects for stressed home buyers this week. Ms Sitharaman announced more credit support to housing finance companies where she extended additional liquidity support to HFCs by the National Housing Bank, which has been increased from Rs. 20,000 crore to Rs.30,000 crore.

The government is also likely to make changes to the definition of affordable housing as sought by developers so that more projects can come under the category. Further, bank loans for developers, which have always been an issue as banks try to avoid lending to developers, may witness some favourable changes.

Developers and distressed home buyers had suggested to the government that a fund be set up for completion of stalled projects.

Further, the real estate sector also received a shock after the National Housing Bank recently asked housing finance companies to stop funding under the subvention scheme. The government is likely to ease the recent direction in favour of developers.

After the Finance Minister met developers earlier in the month, Niranjan Hiranandani, the president of National Real Estate Development Council (NAREDCO), said that the issue of ways to use stress funds for financing stalled projects was discussed.