Amitabh Kant-led committee to look at ways to complete stalled real estate projects

The housing ministry has notified the formation of the committee almost a year after the Central Advisory Council (CAC) headed by Housing and Urban Affairs Minister Hardeep Singh Puri decided to set up the committee.

The ministry of housing and urban affairs has set up a committee headed by Amitabh Kant, former CEO of Niti Aayog and India’s G20 Sherpa during its presidency of the group this year, to look into issues related to completing stalled housing projects.

The panel has been tasked with suggesting ways to complete and hand over the projects to homebuyers in a “time-bound manner,” people aware of the development said.

The ministry has notified the formation of the committee almost a year after the Central Advisory Council (CAC) headed by Housing and Urban Affairs Minister Hardeep Singh Puri decided to set up the committee.

A meeting held on April 12, 2022, had decided that a committee would be formed to look into various aspects of the stalled legacy projects and propose a future course of action to ensure that buyers receive their homes.

The people cited in the first instance said the committee shall submit its report within six months from the date of its first meeting.

The 14-member committee comprises top central and state government officials, including the Infrastructure and Industrial Development Commissioner and Chairperson, Noida, UP government; Secretary, Department of Financial Services, ministry of finance; Secretary, ministry of corporate affairs; Chairperson of the Insolvency and Bankruptcy Board of India; Managing Director at National Housing Bank; Chairperson, UP Real Estate Regulatory Authority; and Chief Investment Officer, SBI CAP Ventures, among others.

Chairperson of the UP Real Estate Regulatory Authority, Rajive Kumar, told Moneycontrol: “We have already commissioned a consultant to study the distressed projects in Noida and Greater Noida and to come up with a set of recommendations which will be discussed with the state government. We are expecting their report to be with us within this month. These suggestions may also form part of the inputs that we share with the Central Committee as and when they decide to meet.”

Stalled projects  

As many as 500,000 homes worth Rs 4.48 lakh crore are stuck across seven micro markets in the country, says an analysis by real estate consultancy Anarock.

The Anarock report takes into account the markets that comprise metro cities. The National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) together account for 77 percent of such projects. NCR has approximately 240,610 stuck or delayed units worth over Rs 1.81 lakh crore. MMR has 128,870 stuck units worth about Rs 1.84 lakh crore.

Many developers of delayed projects are confronting a cash crunch because of financial indiscipline and diversion of funds. They are finding it difficult to execute the projects because the source of funds had dried up or are available at high interest rates and that too only to select developers.

Pending land dues by developers to authorities is another major issue. Stuck projects have to be viable for them to be completed, said experts.

Homebuyers want a practical, fair solution  

Homebuyers welcomed the government’s decision to set up the committee to look into the issue of stalled legacy projects.

“This is definitely a step in the right direction and a very welcome move to resolve the issues of pre-RERA delayed projects. The credibility, intent, seriousness and effectiveness of the panel would have certainly increased many fold had the most important stakeholder i.e the homebuyers were also made part of the same since not only are they the ultimate sufferers but also they have on-ground experience of the various problems being faced,” said Abhay Upadhyay, president of the Forum for People's Collective Efforts.

“The biggest challenge now is to ensure that the panel finds a practical and fair solution for all stakeholders, especially for homebuyers, who are stuck in such hugely delayed projects for years, within the shortest possible time since we have seen in the past that committees at state level have been formed but have failed in finding a solution. The step has certainly raised the hopes and expectations of the homebuyers and we expect that serious efforts will be made to give relief to suffering homebuyers,” he added.