As the real estate sector is one of the major contributors of the country’s GDP and a significant job creator, Madhusudhan G, chairman and MD, Sumadhura Group says that the government should consider the following measures “to bring back growth” in the real estate sector.
Firstly, the government should take more developer and investor-friendly initiatives for the betterment of the real estate market, predominantly for mid-segment housing.
Secondly, the government needs to ensure liquidity for real estate developers. The real estate stress fund from the government is certainly a big boost. However, it would help only the stalled projects, the rest could only be addressed by the banks and NBFCs. To ease the liquidity crunch and improve the cash flow in the commercial real estate front, the 18% GST for the properties that are not sold but developed for leasing, should be ideally removed or adequately addressed.
Thirdly, we are also expecting a single-window clearance mechanism which has been a long-pending demand from the sector, which will greatly reduce the project timelines for developers. The sector expects the Budget 2020 to announce industry status to the real estate sector that will further help in raising low-cost funds and make land acquisition simpler.