'Five lakh homebuyers stuck across nation'

About five lakh homebuyers are stuck in various real estate projects across the country, their associations told finance minister Nirmala Sitharaman on Sunday, when she met the real estate industry stakeholders, including developers, to discuss various steps to revive the housing and real estate sector.

Minister for Housing and Urban Affairs Hardeep Puri was also present in the meeting. Homebuyers and their associations said that the biggest issue faced by them is the delay in completion of projects.

"Over five lakh homebuyers across the country are stuck in different real estate projects due to indefinite delays and fund diversion by developers," said Abhay Upadhyay, president of Forum For People's Collective Efforts.

"This was our first direct meeting with the ministry. The ministers seriously heard our each word. Though no assurance was given, I am confident that the government will come out with something," Upadhyay said.

This was the last in the series of meetings held by the finance minister with the stakeholders of the key sectors of the economy. Earlier, she had met representatives of banks, industry, automobile sector, capital markets and foreign institutional investors.

The country's Gross Domestic Product (GDP) grew at its slowest pace in five years at 5.8% during January-February quarter in the financial year 2018-19. To reverse the slowdown, the government plans to come up with some measures aimed at jump-starting the economy.

In the meeting with Sitharaman, representatives of the real estate industry highlighted the issue of liquidity in completing stalled projects. The meeting lasted for about one-and-a-half-hour.

Both the developers and the homebuyers suggested that a stressed fund should be created to complete the stalled projects.

Niranjan Hiranandani, managing director Hiranandani Group and president of National Real Estate Development Council (Nardeco), told reporters that the issue of ways to use stress funds for financing stalled projects was discussed in the meeting.

The homebuyers' association said that the stalled projects can be solved with a stress fund of at least Rs 10,000 crore. They demanded that a taskforce should be set up to deal with such cases.

"The objective should be to complete all pending real estate projects pan-India within a span of five years by providing for such stress fund continuously for next five years," they said in a letter handed over to the minister. About a half-a-dozen homebuyers of Jaypee Group and three associations of homebuyers participated in the meeting.

Homebuyers demanded the removal of five years' limit for claiming deduction under the Income Tax Act, 1961. "Section 24(b) of the Act should be amended to provide for deduction of interest from income from house property even after possession of the house is received from the builder even after five years," they said. Homebuyers also complained about banks not reducing interest rates on home loans unless applied for.

The meeting also explored measures to promote rental housing in the country.

The real estate players demanded immediate steps to ease the liquidity constraint for timely delivery to the homebuyers. "The finance minister along with the team of officers for the most patient hearing today on steps for reviving housing and real estate," Jaxay Shah, president of Confederation of Real Estate Developers' Association of India (Credai). Credai also argued in the favour of Real Estate Regulatory Act being given due recognition in the resolution of legacy issues, Shah said.