The Uttar Pradesh Government has taken a major positive step by approving the recommendations submitted by the Amitabh Kant committee. This will enable the revival of more than 200,000 stuck apartments across Noida, Yamuna Expressway, and Greater Noida. The committee was established by the Central Government for examining problems linked to legacy-stalled real estate projects.
According to several industry experts, the decision to include real estate projects within the zero period, thereby exempting them from interest costs, is a good move, since it will benefit multiple NCR real estate stakeholders, including authorities, financial institutions, developers, and state exchequers.
As per CREDAI (Confederation of Real Estate Developers’ Associations of India), around 190,000 units valued at Rs. 1 lakh crore are stuck in Greater Noida, Noida, and Ghaziabad. Greater Noida alone has a minimum of 36 projects which are currently facing insolvency proceedings.
Co-Founder and CFO, Square Yards, Piyush Bothra, feels that the approval and adoption of the expert committee’s recommendations will help thousands of homebuyers fulfill their home-ownership dreams. He also adds that this will restore confidence amongst buyers, thereby encouraging higher investments in the real estate sector. This decision, according to him, indicates a highly pro-active approach towards boosting progress and the development landscape of the entire region.
The committee had issued recommendations on the State Government accounting rehabilitation packages for incomplete and financially-distressed projects. The package will have to be tailored to ensure the financial viability of these projects and developers adopting the same should also commit towards a completion timeline of three years. Experts have stated how this move directly benefits 2.40 lakh homebuyers in the NCR and several apartment owners can also proceed with the registration of their homes minus any extra financial burden due to the exemption of interest in the zero period.
An optimistic and strong message has been given to the real estate industry by addressing developer concerns while enabling financial relief simultaneously. A zero period had been recommended by the committee which suspended penalties and interest due to the COVID-19 pandemic and court orders that suspended projects within a radius of 10 km of the Okhla Bird Sanctuary. The State Government can also examine further and provide more zero periods on the basis of local circumstances. The committee had also recommended applying the interest on the basis of the three-year MCLR of 1st June, 2020 for fresh package calculations, thereby ensuring consistency and fairness for all the developers. The calculation is to be done from the allotment date and land delivery to the developer.
For more funds for completing projects, the committee had recommended giving developers permission to integrate co-developers for whole projects or particular parts of the same without any permission from Greater Noida, Noida, and land-owning authorities.
For a detailed report on this read the articles we were featured in:
The Economic Times: https://bit.ly/3tpSfv3
Hindustan Times: https://bit.ly/4aqEGfA
Published Date: Dec 19, 2023
