Corona Crisis: Government Comes To The Rescue Of Real Estate

Corona crisis has affected the businesses in the country in a big way and real estate is no different. However, government has rolled out many rescue measures that are aimed at helping different business sectors in dealing with this pandemic. Prime Minister Narendra Modi has announced a Rs. 20 lakh crore stimulus package. The move has come as a shot in the arm for many sectors including the real estate.

It will be worth stating here that the package is almost 10% of the country’s GDP and is the third biggest contribution in the world after Japan which has offered over 21% of its GDP and United States which has offered a package of 13% of its GDP.

Different rescue acts that have been initiated by Modi Government to revive the real estate sector are explained below.

Force Majeure Invoked For Real Estate

The finance minister has made a suo moto announcement of the extension of the due dates under the RERA by invoking ‘Force Majeure’. It must be understood that Covid-19 pandemic has caused a delay in the completion of the project and quite a few developers were on the verge of being penalized by the regulatory authority. The force majeure clause will come as a great respite for such developers who need more time for completing their projects.

The real estate regulatory authorities can now allow extension to all registration and completion dates of such projects that happened to fall after March 25, 2020 by up to 6 months.

 Liquidity Boost for NBFCs, HFCs and MFIs

The government has announced a liquidity boost of Rs. 75,000 crores to help the realty sector fight the menace of COVID-19.  This opens up a new window for borrowing up to a sum of Rs. 30,000 crores by NBFCs (non-banking finance companies)/ HFCs (housing finance companies)/ MFIs (micro-finance institutions) that will be guaranteed by the government. Moreover, the additional 45,000 crores can be borrowed under partial guarantee scheme.

The government and the RBI have been taking significant steps to resolve liquidity issues of real estate on a consistent basis.

Deadline Extension Of The Credit-Linked Subsidy Scheme (CLSS) By One Year

This announcement has brought to fore the government’s intention to promote affordable housing and its ‘Housing for All’ mission. The extension of CLSS by one year will play a major role in reviving the demand for affordable housing once the economy turns for the better which in turn will help the construction sector to restart operations ASAP.

Industry experts as well as leading developers of the country have expressed happiness and welcomed the government initiatives to help the real estate sector in dealing with COVID-19 pandemic.

Stay tuned to SMC Realty to know more about similar exciting information on COVID-19 pandemic and the steps being taken to counter the menace.