Real Estate Issues Not Completely Addressed, Says Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman on Tuesday acknowledged that the government is yet to fully address the liquidity crunch faced by the real estate sector.
The government is working very closely with the Reserve Bank of India to tweak existing laws to help the affected people, Sitharaman said at the silver jubilee celebrations of the National Stock Exchange in Mumbai.
India’s real estate developers have been struggling to raise funds as lenders turned selective after default by the IL&FS Group triggered a liquidity crisis in the economy. That, coupled with an economic slowdown, stalled a nascent recovery from the disruption caused by Prime Minister Narendra Modi’s note ban and a stricter housing law that armed homebuyers against frauds. The developers are now staring at a huge inventory pile-up.
The finance minister emphasised that the real estate sector requires much more attention. The sector has a spillover effect on very many industries, especially the core sector, Sitharaman said, adding that addressing the issues of the sector will also benefit the core industry that supplies materials to the real estate sector.
Distressed homebuyers had approached the government to resolve several unfinished projects. “Several homebuyers are looking at the government to give them solutions,” Sitharaman said.
India’s real estate sector is now seeing interest from alternative funds, Sitharaman said. “There are many alternative funds which are now approaching us saying we would like to do something with you all so long as there is some supporting mechanism available for reviving the realty sector,” she said.
In September, Sitharaman had announced the creation of a special fund to provide financing to the many stalled affordable and middle-income housing projects in the country.