New Delhi, July 23 : With the Covid-19 pandemic bringing the already-stressed real estate sector to a grinding halt, the President of NAREDCO, Niranjan Hiranandani, has said that alternate investment funds worth Rs 1.50 lakh crore are required for the completion of the stalled housing projects in the country, in line with the 'SWAMIH' fund.
The SWAMIH fund announced last year by the government has a total corpus of Rs 25,000 crore, with the government infusing Rs 10,000 crore of the total fund.
Speaking to IANS, Hiranandani said that banks and financial institutions are willing to invest in such funds and the government does not need to put in any more money.
"We need to have more funds for the purposes of last mile funding of stalled projects, like it has been done in the SWAMIH fund. My recommendation has been to increase that fund from Rs 25,000 crore to Rs 1.50 lakh crore," he said.
He suggested that five more funds with a minimum corpus of Rs 25,000 crore in each are required.
"Various banks and financial institutions are ready to do this funding if they are given permission for an alternate investment fund to be opened by them," said Hiranandani, the President of the National Real Estate Development Council (NAREDCO).
Hiranandani said that he has also talked to major private banks and they are willing to set up and invest in such funds.
The founder-MD of the Hiranandani Group also said that there is a need for sovereign guaranteed loans for the real estate sector in line with the ECLGS rolled out for the MSMEs in the 'Aatmanirbhar Bharat' economic package.
He reiterated NAREDCO's demand for a one-time roll-over of all the outstanding debt of developers to ease the liquidity in the sector. All these suggestions have been made to the government, he said.
Noting that the pandemic may prove to be the "last nail in the coffin" for the real estate sector, which was already severely hit by demonetisation, GST, RERA and the liquidity crisis, he said the government will have to take measures to boost demand in the sector.
He also suggested that GST should be waived for three to six months in order to support demand.
Hiranandani said that although the housing and the real estate sector will grow, several players would be pushed out of the market amid the current crisis.
He said that the consolidation this time would be different as both large and small players may have to shut shop.
"The sector will expand but the question is who will survive," he said.
Speaking on the return of the migrant construction workers, Hiranandani told IANS that some workers have already returned to the construction sites and most of them would return by Diwali.
Regarding the need for more social security schemes for the workers amid the uncertain times, he said the developers would "off course give more attention to the construction workers... but for that the economy will also have to pick up." He felt that construction activity would pick up by Diwali and with the GDP growth picking up, demand should also improve in the first quarter of 2021.
(Rituraj Baruah can be contacted at firstname.lastname@example.org)