By,Anuj Puri, Chairman – ANAROCK Property Consultants
Today’s announcement is much in line with the government’s aim to spur economic growth and build a ‘self-reliant’ India. In the first of the series of announcements the FM will make over the next few days, the real estate sector, NBFCS/HFCs and MSMEs got a major boost on day one.
Providing a major relief to real estate developers, the government has extended the timeline for project completions and registration by 6 months. This is a big move that will destress developers significantly, since construction activity had been halted all across the country. Homebuyers’ wait for their homes will get extended by this move, but this was in any case inevitable.
Further, the announcement of INR 30,000 crore special liquidity scheme for NBFCs/HFCs and MFIs will ease liquidity woes of stressed players. This will benefit the real estate sector significantly, given that NBFCs and HFCs are major lenders to it. As per ANAROCK research, NBFCs and HFCs together contribute almost 56% of total lending to real estate in India currently.
In another major move to revive the MSMEs, the FM tweaked the definition of such companies to provide benefits to many more units. The collateral-free automatic loan for MSMEs worth INR 3 lakh crores will give a lifeline to nearly 45 lakh units for four years. With this, the government aims to curtail job losses, and this could indirectly benefit affordable housing. Fear of job losses may have caused many potential affordable home buyers to defer their purchase decisions.