Booster Measures Would Arrest Job Losses
According to Dr Niranjan Hiranandani, President, ASSOCHAM and NAREDCO, the financial stimulus measures announced by the union Finance minister would, prevent several small businesses from total closure and save hundreds of jobs. What have been the major relief measure from government for the real estate sector? The first set of announcements made by Finance Minister Nirmala Sitharaman adds up to almost Rs 6 lakh crore, missed fiscal stimulus for real estate. The announcement related to the regulatory aspect; of extension of dates under RERA allowed ‘force majeure’ with the Urban Development Ministry issuing advisories to states and UTs to treat the COVID-19 period as an 'Act of God'. Relaxation in project timelines under RERA Act will bring in sigh of relief to the developers and safeguard the interest of homebuyers. 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. 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. How has the Finance Minister addressed the liquidity challenge of real estate in the package announced? NBFCs and HFCs are major sources of credit for real estate. The announcement which is positive for real estate is the INR 30,000 crore special liquidity scheme made in both primary and secondary market transactions in investment grade debt papers of NBFCs/HFCs/MFIs will help in providing funding to the real estate sector. Also the six month extension for RERA registered projects expiring on or after 25th March, 2020 will benefit several developers in a scenario where construction work has come to a complete stand still. This would also prevent them from defaulting on their timelines. What have been the major steps taken to save MSMEs from financial burden? The MSME sectors since lockdown were struggling with the working capital requirement to run their business. The first tranche of the Rs 20 lakh crore package will revive demand back in the economy. This will ensure continuation of smaller enterprises in the market by giving them funds to run the business. Moreover, with announcements of Rs 3 lakh crores collateral-free automatic loans for businesses, Rs 20,000 crores subordinate debt for stressed MSMEs and a Rs 50,000 crore equity infusion for MSMEs through fund of funds will pull the MSME sector from financial doldrums. These measures would also help the companies to resume options needed to revive the economy. A lot of companies want to shift their operations to countries that are better prepared. India is one of the few countries that fit the bill. The measures announced are a part of the Atmanirbhar Bharat Abhiyan or the self- reliant India campaign that would boost investments in Make in India Projects post COVID 19 scenario and would help get additional investments in the country.
Tags : Interviews Real Estate Dr. Niranjan Hiranandani NAREDCO Assocham Nirmala Sitharaman Finance Minister RERA Act NBFCs and HFCs Atmanirbhar Bharat Abhiyan self- reliant India Make in India Projects