Perspective on Finance Minister's announcement by Mr. Ashok Mohanani, Chairman, EKTA World & VP NAREDCO, Maharashtra.
“Given
the distressed economic environment triggered by the health crisis and
the resultant dent in the sentiments of the consumers as well as
stakeholders of the sector, the announcement today was the need of the
hour and has bought some respite.
The Rs. 30,000 crore special liquidity
scheme for NBFCs / HFCs / MFIs will bring in cash flows thereby keeping the
business cycle running and bring in some confidence in the consumer in
the gloomy market.
In another announcement FM suggested a suo moto
relief to the developers for the registration and completion date should
be extended by 6 months for all registered projects expiring on or
after 25th March, 2020 without any individual applications of real
estate projects under RERA in all states with an additional window of 3
months with the permission of individual state authorities.
This move
will ensure the sector gets operational relief. It's a welcome move and a
breather for those who are struggling to pull through the crisis.
However, there is still the need to address the larger liquidity and
cash flows related challenges faced by the developers. The government
has stood by the expectation of the sector to treat the pandemic as a
‘force majeure’ event.
Furthermore,
it’s important for the FM to grant a waiver or reduction in the
interest on terms loans and consider the one time roll over of loans
such that developers can focus and utilise the funds for completion of
projects and repayments can be made back ended.”
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