New Delhi: Realtors' body Naredco on Thursday demanded a stimulus package of at least USD 200 billion to revive the Indian economy from the adverse impact of COVID-19 as well as suspension of insolvency law provisions for six months to prevent companies from becoming bankrput and acquired by foreign entities.
Pointing out that real estate sector will incur a loss of at least Rs 1 lakh crore because of the lockdown to control the coronavirus pandemic, Naredco President Niranjan Hiranandani said the government must allow one-time debt restructuring of the real estate industry and extra liquidity to kickstart business activities.
Hiranandani said property prices will fall by 10-15 per cent and there could be lay-offs and salary cuts in the absence of any relief package. He sees labour shortages till June because of harvesting of winter crops and sowing of summer crops.
"This is probably the worst recession I have seen in my 40 years of career. There is real demand erosion that has taken place," Hiranandani told reporters through a video conference.
Citing examples of the United States and many European nations that have announced a package to the tune of 10 per cent of their GDP, he said the government should come out with a " strong stimulus package of at least USD 200 billion" to revive the Indian economy.
"We have cancer in the economy. We need chemotherapy. Crocin tablet will not help," Hiranandani said, while pitching for the need of an whopping USD 200 billion package to support the economy.
He did not specify the amount required to revive the Indian real estate sector.
He also sought a 50 per cent cut in the GST rate for a period of six months for all the sectors. "Every company, barring pharma and some food companies, has been negatively affected".
Hiranandani also strongly demanded that the provisions of the insolvency law should be suspended for at least six months to prevent "wholesale takeover" of Indian companies.
Otherwise, he feared that good Indian companies will be acquired by foreign firms at a cheaper valuation through bankruptcy proceedings. "We need to protect our companies, banks and NBFCs".
Speaking at the conference, Naredco Vice Chairman Parveen Jain said the construction work should be allowed at the sites where workers have stayed put and not moved to their villages.
Jain demanded that the government should send advisories to all regulatory authorities under RERA to extend the timeline of completing projects by one year. The timeline for other compliances with RERA should also be extended.
The vice chairman demanded that states should provide moratorium on different payments to be made to development authorities.
Since real estate accounts for 6-7 per cent of India's GDP and employs nearly 10-11 per cent of the population, Naredco urged the government to focus on the demand of the developers.
Rajeev Talwar, Chairman Naredco, said in a statement, we urge the government to provide us with a stimulus package to deal with the current situation while we take care of our labour force to ensure that their health and safety is not compromised.