Real estate sector needs Rs 1 lakh crore over the next one year, says Niranjan Hiranandani

The importance of a stress fund, according to Hiranandani, is apparent in the Noida and Greater Noida property market, where the real estate mogul points to over 2.5 lakh under-construction homes that are stalled owing to the real estate liquidity crisis. However, he is quick to emphasize that there is more, which needs to be done, to revive the industry — like tweaking the provisions of the National Infrastructure Investment Fund.

“All that needs to be done is make a change in the fund regulations, which say it’s for infrastructure; we need to add ‘real estate’ to it, which means we can access a large amount of fund,” said Hiranandani.

Another measure he feels could help the sector tide over the slowdown, is the need to change the definition of affordable housing. At present, the Government of India considers a unit with a price tag of Rs 45 lakh as ‘affordable’. “We need to remove the price-cap while defining affordable housing and focus only on project size,” said Hiranandani, “We don’t know why some bureaucrat thought Rs 45 lakh was a suitable benchmark for affordable housing, when it makes no sense for projects in Delhi, Mumbai & Chennai.”

Hiranandani has long been advocating increasing the price-cap of Rs 45 lakh to Rs 1 crore, so as to allow buyers of these homes to benefit from Government rules concerning affordable housing. This in turn could spur buying and resuscitate a stagnant housing market.