Desperate times call for desperate actions appears to be the advice by Union Minister Nitin Gadkari to the builders and flat promoters. He has made a recommendation that they should consider selling their unsold inventory of residential properties on a no-profit-no-loss basis, if they wish to generate liquidity and save on the interest costs on their borrowings.
The minister was interacting with the real estate sector honchos in a webinar to discuss the issues faced by the sector. The trade body, NAREDCO had organised this webinar.
Gadkari, who holds multiple portfolios of Road Transport & Highways, and Shipping as well as Ministry of Micro, Small and Medium Enterprises, advised the realtors to send in their representations to the ministry of housing and finance and the Prime Minister’s Office (PMO) on the present crisis. He said the real estate companies can consider floating their own housing finance companies, the way the automobile companies have done. They can tie-up with NBFCs which can borrow funds from overseas, since the interest rates are lower. They can then sell their flats and properties to the customers at lower interest rates. They could also think of longer-term housing loans thereby bringing down the EMIs.
The minister then told the builders that his ministry is about to embark on building bus depots, petrol stations, hotels and restaurants etc. on highways, and invited them to come and participate in these activities. Some of them can diversify into road construction, where his ministry is finalising huge contracts.
Gadkari advised the builders to move into rural areas and make affordable housing costing less than ₹10 lakh.
On their part, the real estate industry says its cup of woes has been overflowing with the government’s successive moves like demonetisation, GST and the passing of the Real Estate Regulation Act and it is time the government considered a stimulus package for them. The ongoing COVID-19 lockdown has only further made life miserable for the sector.