Maharashtra Should Consider Reducing Ready Reckoner Rates By 40% For Two Years: Devendra Fadnavis

Devendra Fadnavis
Devendra Fadnavis

*  Maharashtra will only remain economically strong if the business backbone is supported and protected

*  I would like to thank NAREDCO to bring changes to deregulate, de-license, and bring ease of doing business: Devendra Fadnavis

Mumbai, 28th April 2020: After a series of webinars with various state officials of the Government of India and Maharashtra, NAREDCO recently got former Chief Minister of Maharashtra Shri Devendra Fadnavis, to address the queries of the real estate and guide them through these challenging times.

Mr. Fadnavis has always guided the industry during his tenure as Chief Minister, now he provided a road map for real estate.

To revive the real estate sector Shri Devendra Fadnavis said, “The present government should bring down the ready reckoner rate drastically to 40% for the specific time period. Reducing the ready reckoner rate to 5% – 10% cannot suffice the sector.”

Commenting on the banking & regulations, Shri. Fadnavis said, “In construction and the realty sector, all loans are term loans and when the banking sector decides to give working capital, those that are categorized as term loans are excluded from getting working capital. This needs to be brought to the banking system and the regulator for economic activity.”

While addressing more than 1500 participants at that webinar, he said, “The common DCR was signed by the previous Government and was likely to be out by November 2019, but the present state government is working on changes and this should come into effect immediately to start rolling the economic activity.”

While speaking to the stakeholder he said, “There is a need to reduce time frame by putting certain timelines from all environment committees so that actual time savings will save loan and finance pressure”.

Talking of deficit policy, he said, “Centre adhering to fiscal deficit target is important as it is mandated by the FRBM Act, but on the other hand saving lives, businesses, livelihood is important too. So right now the focus should be more on enhancing investments rather than looking at a deficit.”

Keeping in mind the current scenario of the sector and the economy, the real estate industry urges Govt. of India to allow restructuring/rescheduling of loan repayment for real estate projects as a onetime measure without change of classification. It also requests the Finance Ministry to provide the home loan at 6% to improve consumer sentiment. For the smooth movement of material and labor, NAREDCO urges the Home Ministry to partially open offices after lockdown.

An extension on various approvals/registrations including RERA Registration, Environmental Clearances, and Building Plan Permissions, etc. by one year automatically without formal applications are also requested.

Interacting with the developers from NAREDCO, Former CM urged the government to prioritize on completing the infrastructure projects in Mumbai, Nagpur, Pune, Aurangabad, and track that they are not stalled as the economy will be dependent on the infra projects.”

“Time is the essence, and one cannot emphasize the need to ensure quick implementation of solutions to the COVID-19 pandemic and related economic slowdown, these need to be implemented at the earliest, said Dr. Niranjan Hiranandani National President –NAREDCO while moderating the webinar. While briefing the grim situation and challenges faced by the real estate sector, he stressed on the role of the sector in the revitalization of the economic growth of the country.

He reinforced that the industry demand that enhancing liquidity is crucial for fueling the economic growth engine which needs an immediate action, need for one-time restructuring of loans, availability of working capital to restart, bailing out of a revival fiscal package, as also the urgency to stimulate the supply chain disruption.

“The importance of reducing ready reckoner rates given the liability that income Tax Act provisions bring in when developers reduce price points and slashing of stamp duty as an extraordinary periodic measure remains in focus to revive demand” he added.

He further added, “The whole real estate sector stands in solidarity with the PM & state government to fight this pandemic.” 

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