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Govt announces steps to revive stuck housing projects in Noida, Greater Noida: Why, who benefits

Context- The Noida and Greater Noida Industrial Development Authorities have approved the Amitabh Kant committee’s recommendations on long-delayed projects, offering relief to homebuyers. The authorities have introduced several measures to assist developers in completing projects that have been stalled for years. These include a two-year ‘zero-period’ relief, a three-year extension without any fee, the option to bring in a co-developer if the builder cannot complete the project, eased mortgage conditions, and the ability to pay land dues in three-year installments.

The ‘zero-period’ waiver means that no interest or penalty will be charged on the builder for a two-year period. According to the order, the builder must deposit 25% of the outstanding amount (land dues) within 60 days to initiate the registration of flats. The remaining 75% is to be deposited with simple interest over the next three years.

Why did the govt have to announce these measures?

  • In Noida, Greater Noida, and Yamuna Authority, many builders have been unable to deliver fully constructed flats to buyers for an extended period. This is due to a variety of factors, including lack of funds, escalating builder dues, legal disputes, misappropriation of funds, and criminal charges against the developers.
  • Consequently, buyers, who are burdened with both bank EMIs and house rents, are not making due payments to the builder. Banks and other financial institutions are also hesitant to lend money to complete the stalled projects, fearing that the builder might default.
  • As a result, builders have not settled their dues with the development authorities, who have consequently withheld permissions for mortgage, registry, occupancy certificates (OC), completion certificates (CC), and so on. This impasse has remained unresolved for years.

What was the committee set up to resolve the issue?

  • On March 31, 2023, the Union Ministry of Housing and Urban Development established a committee, led by Amitabh Kant, the former CEO of Niti Aayog, to devise solutions for long-standing stalled projects.
  • After conducting five meetings with various stakeholders, the committee submitted its report on July 24. The Uttar Pradesh government reviewed the report and approved its execution in a cabinet meeting on December 19.
  • A government order was issued on December 21, detailing the scheme and a phased approach for its implementation. Officials stated that approximately half of the committee’s recommendations have been accepted, albeit with modifications.

How will the relief to builders work?

  • According to the government order, builders will be granted a ‘zero period’ relief from April 1, 2020, to March 31, 2022, in response to the Covid-19 pandemic. Any amount already paid to the authority will not be refunded.
  • Upon depositing 25% of the net dues to the authority, the builder can immediately proceed with registry, plan approval, and extension. This 25% payment must be made within 60 days of accepting the package. The remaining 75% of the dues, along with interest, will be paid over the next three years.
  • The concessions given to the builder, the payment of net dues to the authority, and the registry of houses to the flat buyer will all be interconnected.
  • After paying 25% of the dues, the builder will be allowed to mortgage the land, enabling them to gather the necessary resources to complete the projects and pay the remaining dues.
  • The order also allows developers with projects currently before the National Company Law Tribunal (NCLT) to opt for this package to resolve litigation and complete the project while settling the dues.

How many will benefit?

  • The Indian Banks Association estimates that there are approximately 4.12 lakh stalled housing units across India, with about 2.40 lakh of these located in the National Capital Region (NCR).
  • Data indicates that around 2.30 lakh flats are stuck in areas under the jurisdiction of three authorities in Gautam Buddha Nagar, with the majority of stressed projects falling under the Greater Noida Authority.
  • This scheme could potentially provide relief to approximately 67,000 flat buyers in Noida, 147,000 buyers in Greater Noida, and 14,358 buyers in Yamuna Authority. These buyers have been waiting for the registry and completion of their homes for a considerable amount of time.
  • The order stipulates that the registry for flats that are currently occupied, regardless of whether they have an occupancy certificate, should be completed within three months.

Conclusion- The adoption of the Amitabh Kant committee’s recommendations by the Noida and Greater Noida Industrial Development Authorities marks a significant step towards resolving the longstanding issue of stalled housing projects. The measures, which include a ‘zero period’ relief, the option to bring in a co-developer, eased mortgage conditions, and the ability to pay land dues in installments, are expected to provide much-needed relief to homebuyers and help developers complete projects that have been delayed for years.

However, the effectiveness of these measures will ultimately depend on their successful implementation and the cooperation of all stakeholders involved.

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