The first set of announcements made by Finance Minister Nirmala Sitharaman adds up to almost Rs 6 lakh crore; the announcements today missed fiscal stimulus for real estate. The announcement related to the regulatory aspect; of extension of dates under RERA by allowing ‘force majeure’ with the Urban Development Ministry issuing advisories to states and UTs to treat the COVID-19 period as an 'Act of God'. In terms of actual implementation, fresh project registration certificates can be issued as also, registration and completion dates extended ‘suo moto’ for up to six months. This is indeed a move to combat COVID disruption which practically brought construction work to a grinding halt with additional chaos of migrant labourer’s movement and raw material supply disruption. Relaxation in project timelines under RERA Act will bring in sigh of relief to the developers and safeguard the interest of homebuyers with the revised new timelines for their dream home deliverables. This ensures homebuyers trust in the project and grants breather to the developer’s fraternity for coping up with backlogged work due to natural disaster delays.
Industry is pegging a big hope on much awaited fiscal relief to be granted to the second largest employment generating sector. Liquidity infusion will be imperative to turn around the depressed scenario of the sector.
The other announcement which is positive for real estate is the announcement of INR 30,000 crore special liquidity scheme for Non-Banking Finance Companies (NBFCs) and Home Finance Companies (HFCs) and Micro Finance Institutions (MFIs). NBFCs and HFCs are major sources of credit for real estate, the impact should be easing of the liquidity crisis, especially for stressed players.
