Realty Sector needs a Banking boost: Sunil Mantri
Mumbai, August 20, 2014: The inaugural NAREDCO Real Estate Banking Conclave on the need for Banking and Investment Reforms for the Real Estate sector to meet the vision of Housing for All by 2022 focused on the important issues like seeking avenues for raising capital for real estate development, raising ECB limits, single window clearance for projects and the real estate sectors role in the growth of the economy had a full house in attendance throughout the day. In attendance were heads of Banking and Financial institutions, developers and heads of NAREDCO from various states.
Seeking an active and encouraging participation from the banks and the authorities, Mr. Sunil Mantri, President NAREDCO & Chairman, Mantri Group said ‘Banks exposure to the Real Estate sector is about 4 percent and the developer’s community has to seek alternate routes to raise capital which are short term and expensive’.
The Real Estate sector, which is the second largest contributor to the country’s GDP and one of the largest employers in India, need around $ 2 trillion to meet the vision of housing for all. Looking at the current deficit of over 40 million units, Mr. Mantri added ‘Additional avenues like ECB to raise capital has to be increased from the current $1 billion to around $ 10 billion with faster approvals’.
According to the report, about INR9.5 trillion (USD150 billion) is currently invested in the real estate sector annually, of which about 80 per cent or INR7.5 trillion (USD130 billion) is invested in housing development. Thus, investment in housing needs to be doubled, which can be achieved if investments are steadily increased by 12 to13 per cent per annum.
‘If the investment of USD2 trillion is made, then the real estate sector can contribute about 10 to 12 per cent to the country’s GDP’ added Mr. Mantri.
For the first time, an exclusive full day event concerning the banking and the financial issues in the real estate sector were placed before the RBI/the Government of India, banks, and HFIs by realtors at one platform, aimed to help policy makers to consider it positively to fulfil the Honourable Prime Minister’s dream to create nine crore houses by 2022
The panellists at the NAREDCO Real Estate Conclave had dignitaries like Mr. G. S. Sandhu, Secretary, Ministry of Finance, Government of India, Mr. K. B. S. Sidhu, Joint Secretary, HUPA, Government of India, Mr. R. Gandhi, Dy. Governor, Reserve Bank of India, Mr. S. S. Mundra, Dy. Governor, Reserve Bank of India and Mr. Rana Kapoor, President ASSOCHAM, and MD & CEO, Yes Bank.
About NAREDCONational Real Estate Development Council (NAREDCO) was established as an autonomous self-regulatory body in 1998 under the aegis of Ministry of Housing and Urban Poverty Alleviation, Government of India. It is in this year that the Government of India redrafted the National Housing & Habitat Policy, giving due importance to the Housing and Real Estate sector, thereby declaring housing for all citizens by the year 2010. The Indian housing and real estate sectors and the allied industries hailed the establishment of NAREDCO, as the apex national body for the real estate industry and visualized it as a single platform where Government, industry and public would discuss various problems and opportunities face to face which would result in speedy resolution of issues. It was formed with the mandate to induce transparency and ethics in real estate business and transform the unorganized Indian real estate sector into a matured and globally competitive business sector.
The National Real Estate Development Council strives to be the collective force influencing and shaping the real estate industry. It seeks to be the leading advocate of developing standards for efficient, effective, and ethical real estate business practices, valued by all stakeholders of real estate sector and viewed by them as crucial to their success. NAREDCO works to create and sustain an environment conducive to the growth of real estate industry in India, partnering industry and government alike through advisory and consultative processes.