The long cherished tenacity of mankind to stave off challenges, howsoever mighty, has again come to the fore during the second phase of COVID 19. We seem to have overcome a pandemic in its second and till date most destructive phase and though badly bruised, we came up trumps. And now, we need to tackle resolutely another challenge of putting the market back in shape with some serious efforts as our livelihood depend on this.
The pandemic has brought about catastrophic changes in the livelihood of an even otherwise toiling millions. People have lost not only their means of livelihood but also several near and dear ones, with tragic stories of young children orphaned by loss of both parents, families losing only earning member and such other gory tales abound. In such a scenario, real estate, which stands second in providing job opportunities in India, needs to get back to the pre-pandemic state at the earliest possible and help enable those employed or dependent on the sector to resurrect their lives.
The residential real estate which has been impacted the maximum due to the pandemic, has a big task at hand. At the time of the pandemic, the requirement was of over 2 crores built-up residential dwelling units, including 1/2/3 bhk flats, studio apartments, amongst others in the country to ensure fulfilment of the current Government’s mission to provide Housing For All by 2022 but that goal now needs to be pushed to a later date. But what cannot wait is the need to finish off more and more residential projects which are already way past their deadlines for possession. The need for a roof over one’s head can never be over-estimated.
Real estate companies are gearing up to complete the pending development works in their various projects which had been stalled as a result of the pandemic & resultant labour migration back home. Several big-time projects across the country, particularly in Delhi-NCR belt like in Gurugram, Noida, Greater Noida, Faridabad, amongst others, were left incomplete resulting in huge capital getting stuck. With sales not happening as people were forced to confine themselves to their homes and being just alive suddenly became the biggest task at hand for one and all, it was a very bleak scenario. But the last six months or so has brought some respite to the sector with COVID cases mostly dwindling in the country and even elsewhere in the world and people are again coming out of their homes to transact business as earlier. Though it is still a huge task to reach the earlier normal, yet the mood is one of hope as one embraces the new normal. Several companies are fast-tracking the execution of their projects and even announced new delivery dates!
The Government, on its part, has come up with some important steps. Budget 2021 in the early part of the year brought some cheers for the realty sector. The stress laid on infrastructure development together with continuance of Rs.1.50 lac discount in home loan interest component for another year are welcome steps. The critical financial infusion under the Special Window for Affordable & Mid Income Housing (SWAMIH) fund towards last mile funding for fast-tracking the execution of those projects which have come unstuck for lack of finance is another laudable effort of the current government. I am sure these steps are going to lessen the gloom in the sector, ravaged by the pandemic & resultant slow growth rate. The infrastructure development in the metropolitan cities as well as the smaller Tier II & III towns will give the real estate in these places a much-needed push while also ensuring more job opportunities for the local populace.
The banks and other financial institutions have unfortunately not responded enthusiastically to the need for providing cash capital to the sector. Several big time lenders like LIC Finance, HDFC, PNB, amongst others have been found to be quite reluctant in releasing funds to the sector, even to those who are big time players and with decent payment records. Real estate giants like Ansal Housing, DLF, Godrej, Hiranandani Group, etc. have gone on record to express disappointment in the lack of support from these financial institutions. It is now for the Government to convince these financial institutions to understand the extraordinary situation and help by releasing capital with reasonable payment timeline.
RERA and the local authorities have also been a liability during this period. Though the intent of forming an organization like RERA was quite praiseworthy as it was to bring in some discipline in the realty sector and rein-in the truant players and associates, yet overall it has just been a cumbersome addition to an already lengthy and delaying documentation process to get one’s project cleared. Even the decision of RERA in matters of dispute between the builder and buyer have hardly been fully carried out, thus, helping no one. As for the local development authorities, they have done nothing better than to have totally washed off their responsibility in ensuring a smooth restoration of normalcy.
Though the above points have been discussed and debated at the highest levels with the Prime Minister himself addressing the concerns of the sector and promising to find a solution, yet a lot remains to be done by the Government which has arguably not been seen as being too keen on addressing the issues plaguing the sector in its over seven years in power now. It needs to make revival of the realty sector as one of the top-most priorities as not only huge capital is stuck in it due to the pandemic but also because this sector is the livelihood of millions, counting even those who are part of the several allied sectors like cement, iron, etc. It would have been a welcome move if during her Budget speech earlier in the year, the Finance Minister had answered positively the long-pending demands for industry status for the sector which could have eased the capital crunch facing it, the single biggest impediment in the completion of stalled projects. A golden opportunity was missed then but that can still be made up for now.