The Uttar Pradesh government may soon take a final call on relaxations to be given to developers to revive stuck real-estate projects as a high-level meeting of the top officials was convened last week in Lucknow.
A point-wise discussion on the recommendations of Amitabh Kant panel was held at the meeting, and a consensus was achieved on some points, including the introduction of a zero-period policy on penalties and interests, co-developer policy, partial surrender of projects to recover dues and rehabilitation packages, sources privy to the development told Moneycontrol.
Under the zero-period policy, penalties and interests imposed on real-estate developers will be suspended.
A final decision, sources said, will be taken by the state cabinet after consulting the Centre. More such meetings are likely to “fine-tune” the proposals, they added.
Last week’s meeting was chaired by the chief secretary and was attended by the industrial development commissioner, chief executive officers (CEOs) of the three development authorities – Noida, Greater Noida and Yamuna Expressway Industrial Development Authority (YEIDA).
According to sources, a consensus was achieved on providing four years’ zero period to developers.
This will be provided for projects disrupted during COVID-19 and those affected by the two-year National Green Tribunal (NGT) ban on projects located in a 10-km radius of the Okhla Bird Sanctuary.
Sources said that if measures such as zero period is offered, the Noida Authority may have to forgo about Rs 7,000 crore while the Greater Noida Authority may have to relinquish Rs 6,000 crore and the Yamuna Authority would lose Rs 1,000 crore.
The government has also agreed upon inducting co-developers, with the permission of the concerned development authorities, to complete stuck projects.
The Kant committee had recommended that co-developers can be allowed even without the permission of the authority concerned, sources said.
In the meeting, it was also agreed that the state government will introduce a rehabilitation package to revive the delayed projects and to benefit homebuyers.
This rehabilitation package is likely to consist of a partial surrender policy, allowing developers to partially surrender the land, and dues on the surrendered land can be waived. It will also provide an additional time frame of three years to complete the project and additional FAR (floor area ratio) to builders on payment of extra charges.
Delinking of registries from dues
Sources said that a consensus on delinking registries from land payment dues by builders could not be achieved.
Officials from the development authorities raised concerns about this point and said that it can lead to a situation where authorities may lose control over the repayment process.
Real-estate developers collectively owe around Rs 46,000 crore to the development authorities in Gautam Budh Nagar. They owe almost Rs 26,000 crore to the Noida Authority and about Rs 14,000 crore to the Greater Noida Authority. The dues for the Yamuna Expressway Authority stand at Rs 4,700 crore.
Homebuyers have been demanding to delink registries from pending land dues of builders. If registries are delinked from dues, then lakhs of homebuyers would be able to register their homes.
Sources said that the three authorities also agreed to the Kant committee’s recommendation that after the concession rates are rolled out, developers should pay 25 percent of the total dues within 60 days and the remaining 75 percent can be paid over three years.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
