With spike of 37,148 cases, India's COVID-19 tally reaches 11,55,191

New Delhi, May 25: Realtors' apex body CREDAI has written a letter to Prime Minister Narendra Modi, seeking immediate relief measures to tide over the crisis caused by the COVID-19 pandemic.

The association, which has around 15,000 developer members, has sought one-time debt restructuring, lower interest rate on home loans and tax sops to boost liquidity and demand in the sector.

In an open letter to the prime minister, the Confederation of Real Estate Developers' Associations of India (CREDAI) said, "In this distressful situation arising out of the COVID-19 calamity, we in the real estate sector seek immediate relief for our survival."

Stating that the sector contributes substantially to the country's GDP and has backward and forward linkages with almost 250 industries, CREDAI said, "Our survival, therefore, is not just desirable, it is rather crucial for the economy."

Liquidity crunch, stagnant demand and cartelization of raw materials are major impediments for the industry to kickstart, it added.

CREDAI made seven recommendations to revive the sector and sought immediate intervention from the prime minister.

Pointing out that the situation is "much worse" than global financial crisis in 2008, CREDAI said "a one-time restructuring scheme as was permitted by RBI in 2008 may be quickly instituted by all lending institutions."

Since real estate was already reeling under a cyclical downturn before COVID-19, debt restructuring needs to be allowed for all accounts which were standard as on December 31, 2019, it added.

CREDAI demanded that all banks, non-banking financial companies (NBFCs) and housing finance companies (HFCs) should be directed to provide additional credit equal to 20 per cent of the existing real estate project related advances with no additional security and without the classification of project as NPA.

The penal interest charged by banks and financial institutions should be suspended for a period of one year or until such time as it takes for the pandemic to abate.

To revive housing demand, CREDAI suggested that "government should reduce the maximum rate of interest on new home loans to 5 per cent by subsidizing the interest component of EMIs for next five years."

The limit of principal deduction on housing loan under Section 80C should be increased to 2.5 lakh.

Interest deduction under Section 24 on housing loan for homebuyers may be increased to Rs 10 lakh, it said.

There should be no capital gains for residential properties held for a period longer than one year.

CREDAI also demanded that the subvention scheme be allowed again by National Housing Bank (NHB) and the Reserve Bank.

Under the scheme, builders used to pay EMIs on behalf of homebuyers during construction of projects.

"The economic uncertainty and job insecurity at the moment would not allow purchase of residential property at this time. A scheme whereby a homebuyer would need to pay only margin money with no EMI for 24 months will address this insecurity," the letter said.

The association pointed out that prices of cement and steel have been increased during the lockdown period, and asked for crackdown on cartelisation by manufacturers.

On the GST front, CREDAI said that the current regime of GST provides a rate of 1 per cent  for affordable housing.

"The limit of Rs 45 lakh serves as a criterion of affordability for the purpose of GST. On all other housing, GST is applied at the rate of 5 per cent without input tax credit. It has been felt that the criterion of Rs 45 lakh is too low an index of affordability anywhere across the country, and especially so in the metros," the letter said.

It will serve as an inducement to buyers in the metros if the benefit of GST at the rate of 1 per cent is extended to units costing up to Rs 75 lakh, the association said.

CREDAI pointed out that the flat rate of 5 per cent GST for under construction residential housing is causing cost build up and is acting as a deterrent for sale of under construction projects since there is no GST on completed units.

It suggested that GST rate of 1 per cent and 5 per cent, without input tax credit, should continue.

"However, an option of GST @12 per cent for normal housing/ 8 per cent for affordable housing (with 1/3rd deduction for land i.e. effective GST rate of 8 per cent for normal housing and effective GST rate of 5 per cent for affordable housing) with input tax credit (ITC) benefits in line with the scheme applicable for the works contracts for government may be revived and made applicable to the real estate," the letter said.

Lastly, CREDAI demanded that a Rs 25,000 crore stress fund for completing stalled housing projects should be deployed at the earliest.

"We shall be grateful for your much-needed intervention for the above mentioned measures required to revive the real estate sector," CREDAI said in the letter to the PM.

New Delhi, Feb 24: They hail from vastly different backgrounds — Donald Trump is the son of a property tycoon while Narendra Modi is a descendant of a poor tea-seller.

Yet the two teetotallers, loved by right-wing nationalists in their home countries, share striking similarities that have seen them forge a close personal bond, analysts say.

Ahead of the American leader's first official visit to India, which begins in Modi's home state of Gujarat on Monday, the world's biggest democracy has gone out of its way to showcase the chemistry between them.

In Gujarat's capital Ahmedabad, large billboards with the words "two dynamic personalities, one momentous occasion" and "two strong nations, one great friendship" have gone up across the city.

"There's a lot that Trump and Modi share in common, and not surprisingly these convergences have translated into a warm chemistry between the two," Michael Kugelman of the Washington-based Wilson Center said.

"Personality politics are a major part of international diplomacy today. The idea of closed-door dialogue between top leaders has often taken a backseat to very public and spectacle-laden summitry."

Since assuming the top political office in their respective countries — Modi in 2014 and Trump in 2017 — the two men have been regularly compared to each other.

Trump, 73, and Modi, 69, both command crowds of adoring flag-waving supporters at rallies. A virtual cult of personality has emerged around them, with their faces and names at the centre of their political parties' campaigns.

A focus of Trump's administration has been his crackdown on migrants, including a travel ban that affects several Muslim-majority nations, among others, while critics charge that Modi has sought to differentiate Muslims from other immigrants through a contentious citizenship law that has sparked protests.

Both promote their countries' nationalist and trade protectionist movements — Trump with his "America First" clarion call and Modi with his "Make in India" mantra.

And while they head the world's largest democracies, critics have described the pair as part of a global club of strongmen that includes Russia's Vladimir Putin and Brazil's Jair Bolsonaro.

"There are many qualities that Trump and Modi share — a love for political grandstanding and an unshakable conviction that they can achieve the best solutions or deals," former Indian diplomat Rakesh Sood said.

Modi and Trump have sought to use their friendship to forge closer bonds between the two nations, even as they grapple with ongoing tensions over trade and defence.

Despite sharing many similarities in style and substance, analysts say there are some notable differences between the pair.

Modi is an insider who rose through the ranks of the Bharatiya Janata Party after starting out as a cadre in Rashtriya Swayamsevak Sangh.

Trump is a businessman and a political outsider who has in some sense taken over the Republican Party.

"Modi is a more conventional leader than is Trump in that he hasn't sought to revolutionise the office he holds in the way that Trump has," said Kugelman, a longtime observer of South Asian politics.

He added that genuine personal connections between leaders of both countries have helped to grow the partnership.

"George Bush and Manmohan Singh, Barack Obama and Singh, Obama and Modi, now Modi and Trump — there has been a strong chemistry in all these pairings that has clearly helped the relationship move forward," he added.

Trump has also stood by the Indian leader during controversial decisions, including his revocation of autonomy for Kashmir and his order for jets to enter Pakistani territory following a suicide bombing.

Analysts said the leaders would use the visit to bolster their image with voters.

A mega "Namaste Trump" rally in Ahmedabad on Monday will be modelled after the "Howdy, Modi" Houston extravaganza last year when the Indian leader visited the US and the two leaders appeared before tens of thousands of Indian-Americans at a football stadium.

"The success of this visit... will have a positive impact on his (Trump's) re-election campaign and the people of Indian origin who are voters in the US — a majority of them are from Gujarat," former Indian diplomat Surendra Kumar said.

"On the Indian side, the fact that Prime Minister Modi... (shares) such warmth, bonhomie and informality with the most powerful man on Earth adds to his stature... as well as with hardcore supporters."