According to the latest report prepared by the FICCI on the impact of COVID-19 on Indian industry, the health contagion of COVID-19 disease has the potential to put some brakes on India’s real estate market, given the anticipated slump in demand. The industry was hoping to recover from the prolonged slowdown in 2020.
“The outbreak of coronavirus has not had a major impact on the domestic real-estate market so far. However, a prolonged impact of the coronavirus may not have a favourable impact on the prospects of the real estate industry,” says the FICCI report. The sector is taking all possible measures to mitigate the impact of n-Covid-19 on business such as deferring the house registrations, moderating sales targets in alignment with the current realities etc.
FICCI has suggested several measures to overcome the problem of slowdown in the sector:
- Income Tax department may provide time concessions for paying various taxes. This will help the industry in managing overall cash flows.
- The RBI should come up with steps to contain the possibility of debt defaults in these extraordinary circumstances.
- A large number of companies will see sharp slump in demand, hence a debt restructuring scheme, any form of extension of debt repayment etc will be much required
- Sharp cut in policy interest rate to improve economic sentiments
- Moratorium period to be exercised as due to cash flow issues it will be difficult to repay the loans on time
FICCI wants industry to plan out a process for unorganised construction workers as they will be the most affected ones. One plan could be to increase the number of hours to 10 hours & 3 days minimum work for all. FICCI also wants the Government to consider utilising labour cess fund and pay all the construction workers from the cess collected every year which is about Rs 96,000 crores. FICCI has suggested using large basement facilities in unoccupied buildings as makeshift hospitals/isolation facilities if required.