The real estate market will revive and may see cash inflow with the Cabinet’s nod to boost the construction sector with quick dispute resolution, more liquidity and addressing issues related to stressed assets, feel experts.
The real estate market will revive and may see cash inflow with the Cabinet’s nod to boost the construction sector with quick dispute resolution, more liquidity and addressing issues related to stressed assets, feel experts. In a bid boost the construction and real estate sector, the Cabinet allowed contractors to move to the new speedier arbitration process, approved release of 75 per cent of the amount in dispute to an escrow account against bank guarantee and provided for a conciliation board comprising of independent domain experts in new contracts. The escrow account will be used to meet ongoing project commitments while also servicing bank loans.
Welcoming the initiatives taken by the government , Parveen Jain, president, NAREDCO said, “These steps will again get moving the stalled and delayed projects and bring them back on the right track. These positive initiatives will rekindle the Real estate market with revival of cash flow and generating ample amount of employment opportunities. Overall the measures have been taken meticulously which are positive and welcome”
While announcing the steps, Finance Minister Arun Jaitley said the construction sector contributes 8 per cent of the GDP and provides employment to some 40 million people in the country.
Anuj Puri, Chairman & Country Head, JLL India, said, “The construction sector and its contribution are hugely driven by private sector participation, and hence such encouragement was definitely needed. At a time when we are encouraging investments with added emphasis on infrastructure creation and also providing a push to the real estate sector, such measures come as confidence boosters.”
As the contribution of the construction sector is crucial to the economy and is related to various other sectors, the move is seen as an important step to remove roadblocks.