Govt, developers and bankers discuss problems in the realty sector

A delegation of bankers, real estate developers and officials of the urban development ministry, with the latter's minister, Hardeep Singh Puri, met to discuss problems in the realty sector.
 
Piyush Goyal, officiating finance minister, was to have been at the meeting but did not attend, being busy in Parliament. Sources at the meeting said Goyal would be meeting them next week.  Developers affiliated to sectoral bodies Credai and Naredco, beside the bosses of big companies such as DLF and Gaurs, were among those present. So were State Bank of India chairman Rajnish Kumar, National Housing Bank chief executive S Kalyanaraman and Hudco chairman Ravi Kanth. And, top officials of government-owned NBCC.

 
“We discussed some of our issues with the bankers and the urban development (UD) minister. With the finance minister (FM) not being present, we were not able to discuss all the issues that affect our sector at length. The FM is going to meet us most likely next week,” said the boss of a realty company present in the meeting.
 

Some of the things discussed were around the goods and services tax in the sector, stressed loans and how to deal with these, and issues around rising input prices. Goyal was supposed to interact with bankers on how to revive the sector.

 
“Real estate is an important sector. A lot of reforms have happened already like implementation of the Real Estate (Regulation and Development) Act. More needs to be done,” a UD ministry official had said.
 
Sources said the FM wants banks, developers and the ministry to work in a collaborative way for the sector.  “With a regularised market, the quality of lending will improve. The emphasis has shifted from pre-promotional to fully constructed launches. Bankers will find a larger opportunity to fund the construction activities," a banker said.  Earlier, builders used to come with a proposal and then raise money from the market — none would check if they had constructed. Under new rules, every builder has to first get his project approved and create an escrow account for it.