Nearly 400 developers in Noida and Greater Noida could get some relief with the Uttar Pradesh government considering relaxations in interest, zero-period extension and moratorium on unpaid land premium to offset the losses incurred in lockdown.
On April 9 and May 14, Naredco and Credai, the two active associations of real estate developers, had made a 27-point representation to the state government, seeking exemptions and policy revisions to recover from losses suffered during the lockdown. On May 22, the CEOs of the three development authorities in Gautam Budh Nagar (Noida, GNIDA and YEIDA) had set up a 12-member high-level committee to assess the demands.
The committee assessed 15 policy points and submitted its report on May 26. The government has sounded out a positive response to the recommendations. “We are examining the committee report submitted by the three authorities. We are going to accept their recommendations and offer concessions to the developers. It is important to support industry to keep the wheels turning,” said industrial development minister Satish Mahana.
A source said the committee has commented on 10 of the 15 policy points and sought the government’s consent to amend them. Five others were rejected because they appeared “untenable”, the source added. “Some demands were not feasible and were rejected outright. But others were genuine in the present context and we have sought the government’s approval for revisions on those,” said Shruti, additional CEO of Noida authority, who headed the committee.
Among the demands the committee has approved of are bringing down the annual interest rate applicable on land premium to 9.5% from the existing 12% and to 15% from 12.5% in case of default. The builders had also sought moratorium on land premium instalments between March 22 and September 30 by charging only simple interest.
They also sought extension of zero-period — under which penal interest and dues that accumulated in the period a project was locked in litigation was waived — by six months to December 31, 2021 instead of June 30, 2021. Of the 382 apartment projects under the three authorities, 92 had sought zero-period benefits — 37 in Noida, 43 in Greater Noida and 12 along the Yamuna Expressway. “Because of Covid, all other assignments had taken a back seat. Once we get the government’s approval, the projects can be revived. Benefits would also be passed on to other developers who are found eligible,” said Narendra Bhooshan, CEO of GNIDA.
Two other demands — waiving both stamp duty and fixed power charges — have been referred to concerned departments for review. Developers had said that while no construction work took place at sites in lockdown, the minimum electricity charges still had to be paid. Citing Karnataka, where stamp duty was slashed by 3% recently, they added that a similar move could help revive demand in Uttar Pradesh as well.