Demonetisation and the current Covid pandemic have been cited as two reasons for the devastation of the real estate industry by the state housing industry that is now offering various sops to revive the industry.
In a Government Resolution issued on Tuesday, the department has said, “Initially Demonetisation and in recent times the Covid pandemic has made the financial condition of private developers precarious. Therefore, it has become increasingly difficult to maintain the expected pace in slum redevelopment.”
The GR further states that developers are finding it difficult to pay a 25% premium at the start of the project and are also finding it financially difficult to continue with the project. As a saving measure, the government has framed fresh guidelines for payment of premiums for a slum rehabilitation project on public land. The developer now needs to pay only 10% when the Letter of Intent is issued as against the early 30%, another 10% when the commencement certificate is granted for the sale component of the slum rehab project, and the balance 80% when the Occupation Certificate for the sale component is to be granted.
The BMC has already offered a similar incentive of paying premiums in installments. However, sources said there are instances where developers have only paid the first installment and the remainders are pending. “There have also been instances of cheque bouncing though permissions for the latter part of a project have been granted. The BMC needs to strictly monitor such misuse of government sops,” sources said.
A real estate expert said while there may be instances of developers not paying installments by the due date, it is highly unlikely the BMC would let them go scot-free. “BMC charges interest on late payment,” he said.
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