FM HINTS AT REALTY BOOSTER DOSE
Says the government is planning to tweak existing laws; sovereign funds want to invest in the sector
Finance Minister Nirmala Sitharaman on Tuesday said the government and the Reserve Bank were working to resolve issues being faced by the real estate sector. Admitting that realty had been left out of the booster measures announced earlier, she said the sector has a spillover effect on many others, especially the core sector.
Union Finance Minister Nirmala Sitharaman on Tuesday said the real estate sector needs the government’s attention and the Centre is working with the Reserve Bank of India (RBI) towards tweaking the existing laws to make them conducive for the sector.
“The sluggishness in the sector needs to be addressed and we are glad to tell you that we have alternative funds approaching us,” Sitharaman told media persons during an event to commemorate the completion of 25 years of electronic trading at the National Stock Exchange (NSE).
She said many sovereign funds are interested in the real estate sector of the country and want to work with the government. “There are many alternative funds which are now approaching us, saying we would like to do something with you, as long as there is some supporting mechanism available for reviving the realty sector.”
She said several homebuyers are also asking the government to help them. Reviving the real estate sector will also help other core industries and push employment, she said.
The finance minister accepted that the real sector has not been part of the government’s economy booster plant but now her ministry is ready to focus on it. “The government and the RBI are working to address the pains of the realty sector; until now, we have not touched this critical sector as part of the measures. We have done a lot of work to push consumption since August, but have not touched the real estate sector,” she said.
The realty sector has been struggling for the last three years and has not revived since demonetisation and the introduction of good and services tax (GST). Many bankers have already made it clear that they are extremely cautious while lending to the real estate sector. The sector is struggling with severe liquidity issues and imbalance of supply and demand.
Last month, the government announced a special window to provide last-mile funding for housing projects in the affordable and middle-income category, which are non-npa and not a subject before the National Company Law Tribunal (NCLT). The corpus of the fund is exepectd to be ~20,000 crore.
Of the ~20,000 crore, ~10,000 crore will be contributed by the central government and roughly, the same amount will come from outside investors. The finance minister sought real estate developers and property consultants and wanted to roll out this fund in 45 days. But nothing much has happened on that front.