With the aim of taking corrective measures to resolve issues concerning builder dues and pending registries and to get stalled housing projects back on track, the Noida and Greater Noida authorities have been asked to prepare a detailed report on possible approaches that can be adopted in accordance with the recommendations of the Amitabh Kant committee. The report will also contain details about possible financial implications for the authorities if the recommendations of the Centre’s panel on rationalising interest rates on builder dues or giving a four-year moratorium are implemented by the state government, sources privy to the development said.
They said that the report will also look into the financial implications of de-linking registries from dues, as suggested by the Centre’s panel led by former Niti Aayog Chief Executive Officer (CEO) Amitabh Kant. Manoj Kumar Singh, Development Commissioner of the Uttar Pradesh government’s Industrial Development Commissioner, gave these directions last week.
"A report will be prepared, and then the UP government will decide which solution should be chosen. After the report is prepared, it will be put up for discussion by both authorities to make a better and more informed decision. Notes will then be sent to the state government to take the final call in connection with bringing out some new policy to address these issues," a source told Moneycontrol.
He said that either the government may decide to rationalise interest rates on builder dues or give a moratorium to developers on their dues. The decision would mean that the authorities would have to forgo some portion of the money accumulated in terms of builder dues.
Re-evaluation of dues
As per official estimates, real estate developers owe nearly Rs 26,000 crore to the Noida Authority and about Rs 14,000 crore to the Greater Noida Authority.
According to officials, the Noida Authority has also engaged a firm of chartered accountants to re-evaluate the dues of the builders to get a clear view.
"The report on the recalculation of dues is likely to be submitted in six to seven days. This exercise would present a clear picture in terms of dues. Currently, builders in Noida owe around Rs 26,000 crore to the Noida Authority, of which around Rs 9,000 crore is from non-litigated projects and the remaining nearly Rs 17,000 crore from projects that are in the NCLT or Supreme Court," a Noida Authority official said.
The Amitabh Kant panel had proposed a moratorium on payments that builders owe land-owning authorities. This would enable developers to improve their finances and complete delayed or stuck housing projects, with the provision that the builders would clear their dues in stages. The committee also said that a reasonable interest rate be charged and that the focus should be on completing the projects. Scores of real estate projects are stuck, and many are delayed and entangled in legal battles with the Supreme Court and the National Company Law Tribunal (NCLT).
Developers’ views
Gaurav Gupta, Secretary of the NCR chapter of the Confederation of Real Estate Developers Association of India (CREDAI-NCR), said that CREDAI has said that the interests of homebuyers should be protected and solutions found to these issues.
"It (the Amitabh Kant panel report) is a very healthy report. We are hopeful that sooner the report gets implemented, we will get the solution to these problems," he said.
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