With everyone’s life coming to a standstill, it isn’t surprising that several sectors have been under constant losses because of the lockdown surrounding the coronavirus pandemic.
The real estate body Naredco has estimated a total possible loss of 1 lakh crore that the industry is likely going to experience. In order to get the economy back on track, they have also urged the government for $200 billion package amidst this coronavirus lockdown.
The demands also asked the authorities to lift the ban on the construction sites and also look into the provisions of the insolvency law should also be suspended for at least six months to prevent the wholesale takeover of some of the Indian companies.
Naredco President Niranjan Hiranandani shared his thoughts in a video conference stating, “This is probably the worst recession I have seen in my 40 years of career. There is real demand erosion that has taken place.”
He further went on to say that what they currently have in the economy is cancer. They are in need of chemotherapy, so thinking that crocin tablets will help is not the way to go around it.
Hiranandani also stated saying that he believes that the property prices will fall by 10-15% and there are chances that one might experience layoffs and salary cuts during this time of crisis.
In order to stabilise this, the sector urgently needs an infusion of $200 billion which can further be pumped into the market in a staggered phase to ensure better retrieval of the business without incurring any kind of unnecessary losses that they are currently afraid about.
The industry is also currently on the lookout for working capital, which would further ensure that the economy doesn’t tank and the businesses don’t saddle with the banks, which is often one of the most common things witnessed around.
Hiranandani also asked for 50% cut in the GST rate for the coming period of six months for all the sectors involved around.
He said that the international investors are on the lookout for the economy of India to fall to grasp the opportunity to buy some of the listed companies at a throwaway price.
Addressing that, he further stated saying, “Hence in lieu of protecting the Indian companies, suspension of NCLT law for at least 6 months is imperative to salvage capital erosion.”
People and authorities are in a constant fear that the Indian goods would be acquired by the foreign firms at a much cheaper price with the bankruptcy proceedings. It is now the time that one needs to focus on ways to protect the company.
“It is like the automobile industry; India sells million-plus Maruti cars vis-à-vis a few thousand luxury cars. It is the same in real estate, the Maruti car segment – affordable housing – has much larger demand, and real estate business will have to adapt to the changing circumstances,” Hiranandani said when asked about the kind of challenges that people in the real estate sector are likely going to face.
It is likely that the commercial realty might again bounce back full force within a matter of six months to a year.
By Somapika Dutta