Union minister for surface transport Nitin Gadkari on Friday asked Navi Mumbai developers that providing affordable homes to residents was a profitable option than paying high interest rate to banks on the unsold stock and that catering to 1% population was bad business.
"Everyone knows what is the true situation of the realty sector. You [real estate developers] may be claiming that you have recorded good sales, but I know for the fact what the ground reality is. Their are several homes which are lying unsold and developers are footing bank interest," said Gadkari during his speech after inauguration of the 15th Builders Association of Navi Mumbai property exhibition at Cidco exhibition centre in Vashi.
The union minister said, "There is a need to incorporate new technologies in construction sector, which will bring down the costs, and as a result, will also prove to be beneficial for developers."
He added, "Even today the developers think that one project should be able to earn them lifetime earnings. Those days are gone and you have to concentrate on increasing the turnover and maintaining the profit. How many people in the country can afford to buy homes worth Rs50 lakh and Rs1 crore? The number is hardly 1% and if you are constructing homes for that 1%, it is not going to be a profitable venture."
Gadkari said, "Instead focus should be on providing affordable homes to everyone so that sales increase and the profit is maintained," adding, "We are also in talks with the Reserve Bank to see how interest regime can be moderated and it will help the sector. But there is no point in sitting over unsold stock and paying interest to the banks."
Gadkari said, "The Modi government is focusing on infrastructure development and as part of this we have undertaken various projects in the country. Our main focus is on developing the water transport system for passenger and goods traffic. There is a need to make use of seacoast for communication purpose."
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