Finance Minister Press Conference: Nirmala Sitharaman Announces Relief Measures For Housing Sector And Exporters
Follow live updates from Finance Minister Nirmala Sitharaman’s press conference on Sept. 14.
KEY HIGHLIGHTS
Watch: Relief For Housing, Export Sectors
Finance Minister Nirmala Sitharman announced set of measures aimed at providing relief to the housing sector and boosting exports.
The big announcement was the setting up of a special fund that will provide last-mile funding to affordable and middle income housing projects that are stalled due to a liquidity crunch.
The fund will be run by external professionals. The government will contribute Rs 10,000 crore to the fund while other investors will put in roughly the same amount, Sitharaman said.
The other big announcement, related to exports, was that the existing Merchandise Exports from India Scheme will be completely replaced by a new dispensation named the Remission Of Duties Or Taxes On Export Products. The existing dispensation will continue till Dec. 31, 2019.
Catch all the updates here:
Keki Mistry, chief executive officer of HDFC Ltd., said that the special fund for stuck projects is a welcome step to allievate a lot of stress but guidelines will have to be looked at.
Mistry explained that if a project is stuck due to lack of funding and the developer has not made three monthly installments to the lending bank, then it will get classified as a non-performing asset. In which case, Mistry said, it will no longer be eligible for last-mile funding through the special window.
“This could restrict the number of projects that will benefit from the special window,” Mistry told BloombergQuint. “That is something that needs to be looked at.”
Mistry also said that if the fund will be professionally managed then HDFC will be open to making contributions to it.
Watch the analysis with Mistry and other leading voices from the real estate industry here:
Sitharaman’s full presentation can be seen here
Relief Not Enough, Says CREDAI
The measures announced today by the finance minister are not enough to take care of the demand side of things and more was needed, according to Jaxay Shah, national chairman of the Confederation of Real Estate Developers Association of India.
“Looking at the grave situation of the real estate industry, I think this is not enough. The government has just scratched the surface,” Shah said. “We would've been more happy if the ECB bit directly benefited the developer instead of the HFC or the customer.”
The disruption for real estate from the triple whammy of GST, RERA and demonetisation was an elephant in the room. If everyone can see the elephant, why can the government not? The government has failed to give confidence to the housing industry.Jaxay Shah, National Chairman, CREDAI
Special Fund Could Help 3-3.5 Lakh Dwelling Units
The special fund, with about Rs 20,000 crore, could help protect about 3-3.5 lakh dwelling units, according to Anuj Puri, Chairman of Anarock Property Consultants.
“I think this is fantastic. The announcement on ECB and the fund are addressing the liquidity problem. And the second announcement (house building advance) is trying to address the demand problem,” Puri told BloombergQuint.
That said, these funds are not enough to give relief to the real estate sector as a whole. There are more than 5.5 lakh units that are stuck or delayed in top 7 cities alone which would be much higher if we consider all cities and towns.Anuj Puri, Chairman, Anarock Property Consultants
Welcome Step, But Fineprint Awaited: HDFC's Keki Mistry
Keki Mistry, chief executive officer of HDFC Ltd., said that the special fund for stuck projects is a welcome step to allievate a lot of stress but guidelines will have to be looked at.
Mistry explained that if a project is stuck due to lack of funding and the developer has not made three monthly installments to the lending bank, then it will get classified as a non-performing asset. In which case, Mistry said, it will no longer be eligible for last-mile funding through the special window.
“This could restrict the number of projects that will benefit from the special window,” Mistry told BloombergQuint. “That is something that needs to be looked at.”
Mistry also said that if the fund will be professionally managed then HDFC will be open to making contributions to it.
Net Revenue Impact From RODTEP Export Scheme
The net impact from additional revenue foregone by replacing the MEIS scheme with the new dispensation will be around Rs 5,000 crore to Rs 10,000 crore, the Directorate General of Foreign Trade Alok Chaturvedi said.
Homebuyers' Forum Lauds Announcement
The Forum for People's Collective Efforts, a not-for-profit representing homebuyers, has said that this is a landmark step by the government.
“This shows intent of Govt to clear legacy issues and this is step in that direction,” Abhay Upadhaya, President of FPCE said.
