This decision by the Haryana cabinet will help ease the financial burden and make good some of the losses incurred during the first quarter, say real estate developers
In a major relief to the real estate sector and considering the two-month disruptions caused by the second wave of COVID-19, Haryana cabinet has decided to consider the period from April to May 31 as zero period.
Real estate experts said that while this benefit is much-needed it should have been for a longer period.
To benefit realtors and those holding change of land-use permission, the Cabinet on June 15 approved to treat the period from April 1 till May 31 as ‘zero period’ for the purposes of interest on payment of renewal fee of license on delayed period, submission of fresh bank guarantee on account of grant of license and (penal) interest on payment of instalment of external development works (EDC), state infrastructure development charges (SIDC) during this period, letter of intent/ permissions/ building plan approval/extension of CLU permission and licenses and renewal of licenses and related compliances.
The builders have also been provided interest relief on the pending dues and for time bound compliances.
“This will help developers to reduce their financial outgo in terms any payment of any EDC work to the state infrastructure. As there was no activity on site because of the lockdown, the state government will not consider this period for any such amounts. However, it more of a symbolic relief as the period in question is only one month. It would have been far more helpful if this relief had been provided for a longer period,” said Santhosh Kumar, vice chairman – ANAROCK Property Consultants. Developers have welcomed the decision.
“Under the zero-period policy, the penal interest has been waived off. Despite construction getting hampered for almost two months on account of the second wave of COVID-19, developers have had to bear expenses such as license renewal costs, interest on external and internal development charges and other payments. This decision by the Haryana cabinet will help ease that financial burden. It should be remembered that the second wave has impacted the first quarter immensely and a decision such as this would make good some of the losses incurred,” said Pradeep Aggarwal, founder and chairman, Signature Global Group and chairman – ASSOCHAM National Council on Real Estate projects in gurgaon, Housing and Urban Development.
“The Haryana government has taken a prudent step by granting relief on interest and other time-bound compliances for April and May. This will help the industry, which is floundering in the face of the crisis, to bounce back and return to normalcy soon. The developers can pass on the relief to the allottees and thereby build resilience across the value chain,” said Ankit Kansal, founder and MD, 360 Realtors
“Government should also look into controlling prices of raw materials (cement and steel), direct policy supports such as a cut in stamp duty, and special investment windows for real estate,” he added.
In December 2019, the Uttar Pradesh government had reintroduced the zero-period policy in order to deal with stalled real estate projects in Noida, Greater Noida and Yamuna Expressway. It had at that time decided to waive off penal interest and other dues on builders for the period during which their projects were stalled due to litigation over land acquisition issues. The benefit was applicable to builders who had given a written assurance that they would complete their projects by June 2021.
UP government’s zero period policy had specified that if the housing project was stalled due to a stay order by any court or the National Green Tribunal (NGT), or if the Real Estate Regularity Authority (RERA) delayed possession of deed execution, then the affected period would be considered as ‘zero’.
Source : Money Control