State approves easier payment schedule to boost realty sector

CHANDIGARH: The Punjab government has taken several policy decisions to ease the pressure on the real estate sector.

In a significant decision, the government has increased from 90 days to 3 years the period for which delay in deposit of interest during the moratorium period can be condoned

These and other decisions were taken last week, during a meeting of the Punjab Urban Planning and Development Authority, the department of housing and urban development, chaired by chief minister Captain Amarinder Singh.

A spokesperson said that as per the existing policy, the successful bidder of property sold through auction was mandated to deposit interest every six months during the moratorium period, and delay in deposit was allowed only up to 90 days from due date.

The new policy will provide for condonation of delay up to three years, subject to charging penal interest at 18% per annum.

The meeting, while approving decrease in transfer fee charged by PUDA and other development authorities from 2.5% to 2% till March 31, 2018, also decided to do away with the system of escalation of reserve price for 10 residential schemes.

These 10 Optimum Use of Government Vacant Land (OUGVL) schemes were launched at the old reserve price, without the 10% increase mandated for launch of a new scheme for an ongoing project, in view of the weak market sentiment.

The meeting gave ex-post facto approval to these 10 schemes, thereby providing some relief to the state’s reality segment .

In another decision, the government also approved an amendment to Punjab Urban Planning and Development Authority (Employees Service) Regulations 1999 of Junior Engineer (building), thus deleting the foot note in Schedule III which prohibited direct recruitment of JE (Buildings). This will pave the way for fresh recruitment in this cadre.

It was also decided to increase the reserve prices of some institutional sites to boost the finances of the development authorities

Promoters of real estate projects were facing a lot of problems in the absence of any policy regarding mortgage/ hypothecation of property against the external development charges (EDC), licence fee & other dues.

It has now been decided that promoters of real estate projects shall hypothecate property at a rate of 75% of collector rates for the total amount due. All these steps are expected to help the realty sector as it battles a sluggish business environment.

GOVERNMENT INCREASES (FROM 90 DAYS TO THREE YEARS) PERIOD FOR WHICH DELAY IN DEPOSIT OF INTEREST DURING MORATORIUM PERIOD CAN BE CONDONED