PHD Chamber of Commerce and Industry (PHDCCI) has recommended that ongoing projects can be considered as assets for granting credit to developers, interest waiver of zero period in Uttar Pradesh should be given amid COVID-19 for two years and developers who have applied for part or partial project competition must be given completion certificate to avoid financial stuck bound during Coronavirus.
It also suggested a stimulus of at least 5% of GDP which becomes at around Rs 11 lakh crore to overcome the adverse impact of Covid-19.
The industry body has suggested that stamp duty and registration charges on completed flats for a period of say 1 year should be reduced /waived off. It also suggested that the enhanced interest deduction for home purchase should be brought down this year. For instance, for current year, the deduction of interest could be 200% of interest paid, followed by deduction of 175% of interest paid for 2nd year, deduction of 150% of interest paid for 3rd year and so on.
“The Government should release large funds and resources for on- going infrastructure projects and provide funds to complete stalled housing projects,” D K Aggarwal, president, PHDCCI.
Interest subvention in the form of 0% loan should be provided to any home buyer. Apart from this, moratorium on principal repayment and full waiver of interest on borrowings for six months from March 2020 till Sept 2020 are suggested for facilitating real estate sector.
“Deferment of loan instalments payments up to March 2021 by converting into 5 year Term Loan with one year moratorium, without affecting account classification and credit rating is crucial for the real estate sector,” added Aggarwal.
PHD Chamber also suggested that no immediate reporting of default like SMA 0/1/2/3, NPA, RBI default till Sept 2020 should be done. Minimum statutory compliances for direct and indirect taxes are required to be complied to provide ease. No reopening of old cases should take place of direct and indirect taxes during FY 2020-21. Specially, no cases should be reopened for AY 2013-14, time barring on 31.03.2020 and extension of FY given is to provide relief to taxpayers.
“We suggest to extend additional facilities, flat @30% of existing facility, as Working Capital Demand Loan, with 6 months moratorium and 36 months repayment, on existing security, to overcome cash flow mismatch. We also request the government to introduce fresh liquidity of at least 20% of the loan sizes on case to case basis.,” said Aggarwal.
The minimum wages of the construction labour should be borne by the government utilising labour cess funds collected from the developers, during COVID-19 crisis, suggested PHD Chambers.