The government has announced a Rs 25,000 crore fund to rescue ‘stuck’ projects, and a lot is currently at stake for the Indian residential real estate.
- MMR currently has the highest under-construction stock with more than 5.88 lakh units – 31% of the overall under-construction stock across the top seven cities. Of this, nearly 2.10 lakh units fall in the ‘chronically delayed’ category.
- Among the three southern cities, Bengaluru has the maximum under-construction stock as on date with more than 2.28 lakh units, followed by Hyderabad with nearly 72,300 units and Chennai with 64,300 units. Collectively, only 16% of the total under-construction stock in these cities is chronically delayed (as against MMR, where a significant number of units fall within this category).Immediate measures the government should undertake to re-infuse confidence and further revive the housing sector include:
- Increasing the price consideration of affordable housing to Rs 1 crore in large metros
- Clarifying and expediting the timelines for releasing the funds and actual implementation
- Announcing operational guidelines in terms of geography, the scale of development, progress of construction, asset classification, developer eligibility, etc.
- To get private players to participate in completing stalled/delayed units, provide tax sops and additional FSI benefits to developers interested in taking them
- To bolster demand in the Indian residential space, provide additional tax benefits to home buyers of all budget segments – not just to first-time home buyers and the affordable segment
- Relaxing/removing GST for at least 6 months