Real estate sector hoping for revival steps as it awaits announcements from the Centre in the coming days
The exemptions for the lockdown having enabled the construction sector in the city resume business, builders and developers are executing works with available workforce. At the same time, they are hoping that the Centre comes up with new measures to bail the sector out from the current crisis. A few announcements like extending the Credit Linked Subsidy Scheme (CLSS) till March 2021 are definitely helpful but much more needs to be done. The entire industry is expecting that Central government will announce more incentives that will revive and facilitate the industry to bounce back faster, CREDAI Telangana Chapter chairman G Ram Reddy tells S Sandeep Kumar.
The Central government has already made some announcements.
Yes, they are helpful but not sufficient to revive the construction industry. We are expecting more announcements in the coming days. Extension of RERA deadlines will bring in some relief, CLSS extension till March 2021 is good but it has to be extended by at least two more years. Already six months have passed in the current year. These measures will help in the revival of the market to an extent and ensure some cash flow. In the larger interest of consumers and builders, the Central government should initiate measures that will revive the industry.
Could you suggest a few measures that will revive the industry?
The Central government announced a huge package to bail out the MSME sector. Developers are in a lot of stress due to the lockdown and the escalating cost of raw materials and availability of only a limited workforce. The real estate sector should be considered as a service sector and a special package should be declared. Once this is done, it will facilitate in availability of loans at cheaper rates. This apart, Input Tax Credit should be rolled back and GST has to be slashed. Cement is not a luxury product and the GST on cement is 28 per cent.
Prospective buyers are hoping prices will come down.
There could be distress sale in a very marginal section as small builders will have to meet the rising operational costs and clear payments. The industry is already faced with a lot of issues like escalating cement and steel prices, interests on loans, availability of workforce, rents on equipment and all these factors in turn will escalate the prices further. This is where the Central government should come up with measures like decreasing the rate of bank interests for a limited period for consumers to improve their buying sentiment, besides reducing GST. Apart from cashflow into the market, these measures will boost the sector and pay dividends to the government in the form of taxes.
What has the lockdown impact been on the construction sector in Hyderabad?
At this stage, it is tough to calculate the impact. There is definitely an adverse impact and things will be clear only after normalcy is restored. At present, Hyderabad is selling about 30,000 units a year and to continue that, builders have to shift gears in their operations post lockdown. The State government is extending a lot of support to the industry in ensuring availability of raw materials and is implementing TS-bPASS from June. As is being said, people will have to learn to live with corona and plan for their future.
What is the status of the ARK Group projects?
Well, seven projects are under progress. While, two private projects are on at different locations, the other residential projects are being taken up at Bolarum, Kondapur, Gajularamaram, LB Nagar. They are at various stages of completion. The good sign is that there are enquiries from genuine buyers and a few are insisting on site visits but with lockdown in vogue, it is not being permitted. We are hopeful of closing a few deals in a few days.
