CREDAI bats for urgent support for real estate

New Delhi: Real estate body Credai has written an open letter to Prime Minister Narendra Modi seeking immediate measures from the government to help the real estate sector 'survive'.

"In this distressful situation arising out of the Covid-19 calamity, we in the real estate sector seek immediate relief for our survival," it said.

The industry body said that it has done its best possible to mitigate the plight of over five crore labour force in the sector by providing food and shelter.

It said that although the loan moratorium may be helpful for the sector in the long run, the sector requires a one-time loan restructuring scheme as allowed by the Reserve Bank of India in 2008 amid the global financial crisis.

"Since real estate was already reeling under a cyclical downturn before Covid-19, such restructuring needs to be allowed for all accounts which were standard as on December 31, 2019," the letter by the Confederation of Real Estate Developers' Associations of India (Credai) said.

Credai further said that the Centre should direct all banks, non-banking finance companies (NBFC) and housing finance companies (HFC) to institute a scheme to permit additional credit equal to 20 per cent of the existing real estate project related advances, at the MCLR with no additional security.

It also suggested that government guarantees can also be extended for such credit if need be.

The letter dated May 24 also requested that the penal interest charged by banks and financial institutions be suspended for a period of one year or until the pandemic abates.

Alleging sudden increase in cement and steel prices by the producers, Credai said that controlling prices of the raw materials is highly essential for construction activities to start.