AMITABH
KANT COMMITTEE - ECONOMY
News: NAREDCO on Amitabh Kant panel
report: Agreed there’s financial stress, didn’t recommend direct support
What's
in the news?
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A 14-member
committee, constituted to examine stalled real estate projects and
recommend ways to complete them, submitted its report on August 21.
Amitabh
Kant Committee:
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The
Union Ministry of Housing and Urban Affairs had set up a committee in
March, 2023.
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The committee was chaired by former NITI
Aayog CEO and India’s G20 Sherpa Amitabh Kant.
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It included officials of the Union Finance
Ministry, Uttar Pradesh and Haryana state governments, the Insolvency and
Bankruptcy Board of India, the National Housing Bank and the Real Estate
Regulatory Authority (RERA) of Haryana and UP.
Findings
of the Committee:
1.
Issues of the Stalled Projects:
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The committee’s report cited the Indian
Banks’ Association (IBA) as estimating that 4.12 lakh dwelling units of Rs.4.08 lakh crore were “stressed” and
about 2.40 lakh (44%) of these were in the National Capital Region.
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Another 21% of the units were in the
Mumbai Metropolitan Region.
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The committee concluded that the main
reason for the stress in these projects was the “lack of financial viability”,
which had led to cost over runs and time delays.
2.
Suggested Solutions:
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The committee said the way to solve the
problem would be to improve the Internal
Rate of Return of the projects in order to attract funding.
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The committee said that in order to make
the projects viable, all stakeholders — that is the developers, financiers,
land authorities etc. — would have to take a “haircut” or accept less than what
is due to them.
Recommendations
of the Committee:
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Mandatory RERA Registration
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Rehabilitation Package for Stalled
Projects
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Special Window for Affordable and
Mid-Income Housing (SWAMIH) Fund