Measures by the government that could revive Real Estate

The government is undertaking measures to recover the real estate sector affected by COVID-19. 

Before the Covid-19 outbreak, the Indian economy was one of the fastest-growing economies of the world (According to the International Monetary Fund). However, due to the outbreak of Covid-19, the economy is on the back foot almost 20 years, so is the already stressed real estate sector. To handhold the real estate and construction sector, the Government has rolled out certain measures viz-

• Announcing the relief measures for already aggrieved real estate developers, the Government has increased the threshold for initiating the default proceedings under the Insolvency and Bankruptcy Code (IBC) 2016, from Rs 1 lakh to Rs 1 Crore. This will help keep a check on the unscrupulous and frequent insolvency proceedings against developers, especially during tough economic times.
• The Government has also assured that if the present strained economic scenario continues beyond six months, it will actively consider suspending Sections 7, 9 and 10 of the IBC (all related to starting Corporate Insolvency proceedings).
• The Government has urged the State governments to utilise Rs 31,000 crore fund for the welfare of construction workers to minimise the adverse impact of the lockdown.
• Release of a relief package to the tune of Rs 1.71 lakh crore will primarily benefit the migrant construction labourers.
• The massive reduction in the Repo rate (75 bps), Reverse Repo rate and CRR by the Reserve Bank of India (RBI) will lower the cost of borrowing for the real estate sector and will help the projects delayed due to want of funds.
• The deferment of home loan Equated Monthly Installments (EMIs) will help the borrowers and business community utilise funds for the priority activities.
• The deferment of dates for key filings such as ITR, composition scheme, and Aadhar-Pan linkage will ease the burden of compliances.
• The State governments (Delhi, Maharashtra, Gujarat, Uttar Pradesh etc.) are offering compensation to the migrant workers for the loss of employment, arranging for temporary shelters and food. The Delhi government has also offered to pay rent of the migrant citizens so that they stay put at the place of residence.
• A recent judgement of the Supreme Court of India to categorise the construction workers and labourers as consumers will also help in this regard. It will ensure that no statutory benefits are denied to this section.
•  Maharashtra and Karnataka RERA have extended the completion timelines of the real estate projects by three months each. This step will help the distraught developer community immensely.
• Looking at the rising cases of infection, the Government of India has banked on technology for dealing with the infections and spreading awareness through mobile phones. The Government of India has rolled out a mobile application called ‘Aarogya Setu’. The application uses the location, mobile number and Bluetooth to check if the user has interacted with someone who could have tested positive for COVID-19.
• The Government of India has rolled out an ordinance to reduce the salaries of President, Vice-President and Governors. The Cabinet has decided that all the Members of Parliament (MPs), including Prime Minister and the Cabinet will also take a pay cut of 30 percent for a year. 

The government regularly instructs people via every source of communication to use sanitizers and hand wash at frequent intervals. Furthermore, handshakes and close contact with people are being told to avoid. It is our duty to follow the instructions given by the government for the well-being of our society. Needless to say, this is the time to stay positive and spend time at home with your family. 

Conclusively, with Coronavirus reaching India, the real estate industry needs to brace itself for an even worse impact than previously thought. With the threat of infection affecting human lives, the real estate sector is already seeing a decline in property visits and buyer interest. However, the world has faced similar outbreaks such as SARS virus, bird flu etc. in the past too and has successfully recovered. Every calamity is an opportunity to scale new heights. Indian real estate and allied manufacturing industries must find positivity in the scenario and benefit by increasing production and indigenous innovation. The government would do well to stop further proliferation of the virus and handhold the industry in the times of crisis.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. Propertypistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.