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Relief for stressed home buyers! Cabinet opens Rs 25,000 crore window for stuck houses

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(Potomac, Maryland)

It is a good measure by the government.An unfinished and half-finished home is worth only scrap value. Once it is finished, the house is likely to gain full value.Home buyers have perhaps committed some funds and have promised other funds (by way of mortgages). It is just that they should gain that value with government assistance. If the value exceeds such value, government should get a share on the appreciation for its investment. That would be smart investment strategy by the government as the custodian of the taxpayer funds. The developers should not benefit from such help unless the situation is in spite of their best efforts.

1600 projects,450000 houses,25000cr is 16 cr,280 houses,5 lacs each to complete.is it possible 40 percent yet with 5 lacs maximum three week work can be only done.

Correct me if I’m wrong:- Banks lends large amount of money to corporates/companies under the approval of our ministers and these cos in turn donates to our politicians/ministers, which gives them enough funds to buy MLAs etc which in turn gets them elected and have power. So when these Big companies and corporates stopped paying the Loan, the govt rescue these defaulters with the help of other profit making state owned banks ??? This is why people like Nirav Modi are becoming a celebrity rather than a criminal!

There are 2 sides to this step.. This will be welcomed by the person whose flat is stuck for years due to lack of fund by the builder.. For others, this is a complete waste of money.. Unfortunately govt has no option at present.. It will have to shell out this money from its own pockets for these projects and also it will be the same case for PMC Bank.. The affected people have to be relieved in both the cases...

Since BJP took over, there has been No corruption No scams and Howdy Modi is a dynamic leader - "Modi hai to sambhav hai". Then why is the economy in dumps. No one is buying real estate and no one is building.And Sitharaman is doling cash to prop up Builders.

Subramaniyan

This is the result of years of mindless sanctioning of loans to one and all without checking credentials and just depending on a call by any neta / any industry house. Must appreciate FM''s intitative to clear this mess in a positive manner.

GOI is draining the tax resources on sick companies. First it make the company/sector sick by imposing higher taxes or other plethora of policies. Then by the same money it tries to bail them out ... what type of logics is this . Could not the policy makers see all this coming.

Ramesh

RS.25000. CRORES. FOR THE STRESSED BUYERS....AND 1.5 LAKHS CHARITY FOR SUPER RICH CORPORATES DOES NOT. SOUND PROPER. THIS AMOUNT MUST B HIDDEN LOSSES OF HDIL N DHFL ..... THE GREATEST FM EVER IN THE WORLD COUNTRIES......

Prince Gw (India)

GOI is a poor investor. While all other countries in the world are investing in green fields in India, GOI is putting money in NPA sectors. These sectors have few takers and will not result in many major recover. Sensible investments must flow into sectors which can kick start economy cycle like food processing, rural employment and urban projects. Autos have been already more than bearable limits and hardly any space for parking. Houses are stagnant because of reckless construction and prices.

Sanjay

Relief for some companies like PEL (having deep connection with RIl) not for the homebuyers or realty sector as a whole.

Another damage control measure after corporate tax reliefs,for the ill planned and poorly understood demonitisation. Many more to come as hurt market sentiments take really long to recover. God help.

Kochar

Extremely welcome step - Jaypee Infratech should now avail of this facility to deliver the 15000 units

This is the price we are paying because of demonetisation.

Padmanabhan (Hyderabad) replies to Vinod Jain

Well said.

First of all which stalled projects is Govt hinting at? Those whose builders have filed for bankruptcy? Those builders who have funded political donations and now seek return from the Govt ?? If appx 500 to 750 crores is the cost of one average size tower to complete, imagine how much money is required to complete?

Aryabhusan

Systemic mis use of money and weakening of institutions. We are treading on thin ice. Current government''s situation is like the highly optimistic guy who comes to exam with selective preparation. Current economic scenario is throwing difficult questions and to answer those you need sound understanding of the concepts and if you do selective study, every question will be out of syllabus.The aim of governments should not only be to win elections but also to make life better for its citizens.

Manish Gupta (Gurugam)

Now government should exempt real estate apartments from capital gains tax just like Singapore. That will create demand from locals and NRI''s. Anyway probably no capital gains tax is coming to the government.

INDIA IS THE GREATEST COUNTRY IN WORLD. MOST DESIS JUST DONT KNOW IT YET. TIME TO GET SMART AND START LIVING BEAUTIFULLY. AN APARTMENT RENTAL IS 2000 DOLLARS IN USA vs 200 DOLLARS or 15000 RUPEES IN INDIA. FOOD IN INDIA IS 80% CHEAPER. HEALTHCARE IS 80% CHEAPER COMPARED TO WEST. SAME FOR EDUCATION AND SERVICES, 100,000 dollars in USA versus 10,000 MAX IN INDIA. STOP COMPLAINING. START IMPROVING YOUR LIFE QUALITY YOURSELVES. INVEST IN INDIA AND YOURSELVES. STOP BEING FAKE FIRANGIS. USE YOUR BRAINS. THINK, ACT AND GET RICH. VANDE MATARAM

Pl see today vegetable price,average american per capita dispisable vs average indian household per capita income.pl read about starvation death in north east union territory

Spaceman

Realty firms will take the money and just increase their prices and profits

Spaceman

She is throwing good money after bad money. India is going to be Greece soon

Sanjay

Only solution. Flat prices must be slashed 30-40%

John

once the 300 millions Indians working in beef eating countries come back as ghar wapsi then we can expect them to buy these flats

Bhakth

Madam''s budget was silent and we don''t know where this money coming from. Already GST collection less than expected, Corporate tax income should less. Just one option is RBI has to print currency without any basis.

N O T A (Chennai)

OK so they complete the projects but then whos going to buy? There are already 12.7 lakh completed flats that are unsold. The fact is buyers have no money.

Siddhartha

tuuuuu, first concentrate on core rather giving packages to effected sectors how long you keep giving

Bipin

Excellent step - this will facilitate completion of lacs of flats which got stuck due to the abrupt cutoff of funding -

FMs and govts only favours corporates! without money in the pocket who will buy?!

Jatin

SBI again starts reducing rates on savings account and on Fixed deposits which ultimately causes a major loss TO honest taxpayers..

Jatin

Today FM decision only favour the big builders not the small or mid ones due to their contacts and hold on judiciary and ultimately it cannot create any major upside in real estate sector.

Hindustani (India)

It is good that government is showing some concern about suffered home buyer. But, this effort will not increase or incline end users towards buying new home. The biggest reason - The people who received their home has passed one battle but entered into lifelong battle in most of the newly build societies because, after builder era now it is RWA/ AOA era, powerful and politically connected are mostly grabbing RWA offices of the societies by some or other means and then grabbing the society money and making people suffer in many front. Overall it is spreading a bad experience across everywhere. This is a growing concern not at its pick but if not addressed early will create lot of unrest and hurt the future growth of real estate.

The Negative Commentators do not understand the importance of this announcement. The FM should also force RBI to allow Banks to Restructure Residential Project Loans to give breather to Developers who are stuck badly because of low off-take.

But where are buyers? even on completed project there are no buyers.

one more blunder. how will it increase buyers? why money of tax payer and sbi and lic for this blunder?

Somnath Dasgupta (Calcutta, India)

Just a few suggestions so that this does not become a second loot of the public tax payer''''s money - 1) Related party transactions should not be allowed by firms who will be completing the project as this is the most common route of siphoning of money. So contracts with sub contractors should be checked for common ownership. 2) Executive remuneration of such firms should be scrutinised closely and periodically until handover of projects is complete. No incentives should be allowed. 3) There should be a total freeze on dividend payments until project handover is complete. 4) A 3rd party certification as to fitness for purpose and professional guarantee with corresponding insurance at the cost of the firm should be made mandatory prior to handover to buyers. 5) Provisions should be instituted for recovery of govt funds from defaulting promoters to the utmost extent possible. 6) Gold plating by firms should be avoided at all costs and hence there should be a signoff on the costs of completion prior to release of funds to the firms.

Sanjay

So, the eligibility criteria has been changed. NPA accounts are also eligible now what were supposed to be out of the purview. But, who will be the new buyer? Moreover, the price has been decreased compared to be the price of the apartments under question. So, a person intended to buy a property earlier may opt out. Nothing will be changed. The government is not even trying to understand the problem and trying to repair the supply side. They have destroyed the demand side and looking here and there for controlling the damage. The core sector is already in recession and the other sectors of the economy is heading for the same way and incompetent persons making the situation much more worst than prevailing bad condition.

What the Minister doesn''t realise is that some projects get stalled because the builders cheat home buyers by trying to construct on existing Amenity plots given to completed Society''s in Pune Clover Developers have done this in all their projects.

Savitha Kl (Bangalore)

Common mans taxes, psu bank like sbi n lic raided for making few cronies rich

Great! But housing sector as well clearance of land is very crucial for development of Real estate sector. All this measure will ensure the some liquidity in this sector specially in housing for common man.

Hemant

Land mafias, politicians money and funding babus have kept builder''s spirits high over many years. Old habits die hard. All these monies will go to the similar chain in the last mile. And yes 10% projects may succeed. So nothing great can be achieved.

Namoona Feknewala (Humara India)

Crony govt working hard for builders, and BJP will charge commission on every grant made from this fund.

Rewarding

another jumla by the govt

Neelam

To do something just for doing something is nothing but to give courage to defaulters to default and public money is there to support you.

Vilas

This 10000 crores should be in pocket of tax payers and not builders !

This is a good step. If more inventory will be converted into liveable inventory, then the demand will reduce which will further help in reduction in prices of real estate flats. Good for general public

Manu

real estate is greatly depended on housing finance companies and banks to finance they projects. Entire world''s economy is going under slow growth. Even in China. NBFC played a major role in giving loans for customers and companies for mainly housing amd automobiles. When crisis started. There is slow down in these two sectors. Our FM gave good aid in Refinancing the companies to complete project''s

Abhay

Nice path adopted to donate tax payers'' money. Those who are unable to purchase home, any financial assistance? Any viable scheme? Those who have not purchased home are loossers/guilty. Any action to book Promoter ?

The Builders are responsible for lack of sales due to exhobirant pricing and lack of quality in construction. The government has made a wrong move by helping builders. SBI Chairman himself has stated that the problem is only because of the reality industry as a whole

Housing project is at low because of the sentiments and fear in the minds of home buyers and project lenders. Neither RERA nor govt 25000 crore fund protects the interest of home buyers or project lenders. Home buyer or project lender is unaware about the inventory management of the builder/ housing project. Suppose I buy a flat in one of the housing project, I or the lender from where I take home loan or the project lender of That housing project can not verify whether the said flat I am buying is not already sold or mortgage. Inventory management is solely at the discretion of the builder/ promoter and he easily manages the audit , inspection etc. Govt should come out with rules n regulations so that every flat being sold by a particular builder is registered with sub registrar (In short it should b mandatory to register Agreement to sell with SRO) so that home buyers interest is protected. This will bring confidence among the people and people will start investing/ purchasing in under construction projects. When the individual flat will get registered with SRO we can verify how many flat are sold and whether the project is mortgaged with the lender or not.This will bring transparency in the system, govt will get revenue from stamp duty n registration charges and common man will have the confidence to buy invest in any project. Every one needs a house and in the current situation when people are not getting the possession and in many case the flat they have invested is multiple mortgaged / sold , others are not ready to invest /buy.Govt should take steps to bring confidence among buyers.

Cement and real estate stocks will fly tomorrow.

Shivaji

where is the accountability ??

In one shot super economist sitharaman has set up a . 2 trillion fund . Keep up the amazing work

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