Reacting to the real estate developers’ demand for extension of project completion timelines by six to nine months on account of the second wave of COVID-19, housing and urban affairs ministry secretary Durga Shanker Mishra said on May 28 that the government will look into the matter.
"If need be, we will take this matter to RAC (RERA Advisory Council)," he said while addressing a webinar organised by the real estate body Naredco.
Mishra also made it clear that the relief was provided to realtors last year due to the imposition of the national lockdown. “It was done to ensure that there were no unnecessary litigations,” he said.
It should be noted that in May last year, the Centre had issued an advisory asking real estate regulators in states and union territories to extend by at least six months the deadline for completion of projects in the face of the coronavirus outbreak.
The outbreak of COVID-19, the respiratory illness caused by the coronavirus, be treated as an “act of God” and a “force majeure” event under the Real Estate Regulatory Authority (RERA) Act, the housing and urban affair ministry had said in the advisory issued on May 13, 2020.
Realtors at the conference said that both demand and supply had been badly impacted on account of the pandemic.
Besides seeking extension of timeline for completion of projects by 6-9 months under the RERA, Naredco members also sought extension of all building permissions until March 2023, rationalisation of government taxes on real estate, and said that the government should take steps to control prices of cement and steel.
The builders’ body also sought reintroduction of interest subvention scheme, grant of input credit tax on GST paid in leased commercial real estate, suspension of insolvency law for some time and an online environment clearance system.
On the issue of high taxes levies imposed by the central and state governments on the real estate sector, Mishra said that the ministry's senior officials would examine the issue in the detail. "We will try to reduce government levies," he said.
Regarding a rise in prices of steel and cement, Mishra said he had taken up the matter with the concerned ministry and would do so again.
Mishra said that maximum demand for housing was in the economically weaker section (EWS) and low-income group (LIG) segment and focus should be on constructing affordable housing.
Talking about the Central Vista Project, Mishra said the new Parliament building will be ready next year. He also rubbished criticism about the project.
In his opening remarks, NAREDCO president Niranjan Hiranandani, said that construction activity during the second wave had slowed down and that sites were working at almost half of their capacity. He demanded that timeline for completion of projects should be extended as it was done last year.
NAREDCO Chairman Rajeev Talwar said all permission related to the development of projects should be valid until March 2023.
Tata Housing MD and CEO Sanjay Dutt said steel prices have more than doubled while cement rates have gone up by 50-70 per cent in the past one year and called for the reintroduction of the subvention scheme.
Neel Raheja of K Raheja group sought input tax credit benefit for the commercial real estate sector.
Earlier this month, in its letter to the ministry, the National Real Estate Development Council (Naredco) had also asked for an extension in project completion timelines.
“In view of the difficulties being faced by the industry, we sincerely request you to issue advisory to State Governments and their RERA Authorities for further extending the completion date for all real estate projects registered under RERA for a period of 6 months, with a provision of further extension,” Naredco had said in its letter to the ministry.
“We also request you to kindly issue advisory for ‘suo moto’ extension of the timelines of various time-bound permissions, like No Objection Certificates (NoCs), approvals related to real estate construction projects etc,” it added.
In a letter to the ministry of housing and urban affairs, another builders’ body Credai National, had said that due to shortage of labour, disruption in supply chain of raw materials and other unforeseen factors, there may be a delay in the overall lifecycle of construction projects.
It had asked the ministry to issue a “directive to all the states to extend the validity of all the existing approvals, licenses and no-objection certificates including those given by RERA accorded to real estate projects may be extended by a period of nine months."