CHENNAI: Confederation of Real Estate Developers Associations of India (CREDAI) has urged Finance Minister Nirmala Sitharaman for a one-time restructuring scheme with moratorium on principal and interest rates for a period of two years.
This comes in the wake of failure of several big NBFCs, which has hit developers with liquidity shortage. CREDAI has urged that banks and financial institutions be given discretion to one-time restructuring or rollover of their existing loans to other sectors.
‘Increase the limit’
S Sridharan, Chairman of CREDAI, Tamil Nadu chapter, has asked for affordable housing limit to be increased to Rs 75 lakh from Rs 45 lakh. He also said that CREDAI should be a universal definition of affordable houses.
"It should comprise of units with a carpet area defined under Real Estate Regulatory Authority (RERA), that do not exceed 60 square meters in metros and 90 square metres elsewhere," he said. This comes as residential launches in Chennai grew by 11 per cent YoY to 11,542 units in 2019. Similarly, sales for residential properties here rose by 6 per cent YoY, to 16,959 units in 2019, according to property consultant Knight Frank.
‘Reduce interest rates’
Meanwhile, Builders Association of India (BAI) chairman S Ramaprabhu said the association has sought interest rates for affordable housing to be reduced to 3 per cent only, and for housing loans below Rs 1 crore, a 6 per cent interest rate was demanded. He said they have also sought a waiver from the stamp duty for affordable homes and an income tax rebate on interest on housing.
‘Enhance IT exemption limit’
R Kumar, MD of Navin’s suggested enhancement of the exemption limit of Rs 2 lakh on the interest paid on housing loans under section 24 of Income Tax Act, to a minimum of Rs 5 lakh.
He also said the Pradhan Mantri Awas Yojana Scheme, which benefits middle income group housing units, come to an end on March 31, 2020. "We expect the budget to extend the date by two years, coinciding with that of EWS and LIG," he said.