REAL ESTATE AFFAIR
supposed to be built in three years
ended up taking five years or more.
Then, funding for projects dried up,
as banks and shadow banks cut back
amid growing piles of soured realestate
and infrastructure loans. This
forced more delays and even the
mothballing of many projects.
More than 450,000 apartments
have been delayed for more than
three years. Housing projects in
Noida in January 2018. PHOTO:
ANINDITO MUKHERJEE/
BLOOMBERG NEWS
More than 450,000 apartments
have been delayed for more than
three years, according to a recent
government survey. The value of all
the delayed projects is more than
$50 billion, 10 times the number
five years ago and still half of what
it will be in the next few years,
according to PropEquity.
Analysts say the government may
need to create its own bad bank
specifically for real estate to take the
bankrupt projects off the lenders’
Samir Jasuja, founder
of PropEquity, said
the industry needs
government money
and guarantees as well
as guidelines about
which projects get
saved and how. Without
government-backed
funds to rescue the
most viable projects, the
problem will only spread,
he said. “This hole is
going to get bigger and
bigger and more money
is going to go after bad
projects,” he said.
books. New Delhi has already
merged struggling state banks into
bigger banks, while the central bank
cut interest rates five times in 2019
and eased restrictions on healthy
lenders.
Samir Jasuja, founder of
PropEquity, said the industry needs
government money and guarantees
as well as guidelines about which
projects get saved and how. Without
government-backed funds to
rescue the most viable projects, the
problem will only spread, he said.
“This hole is going to get bigger and
bigger and more money is going to
go after bad projects,” he said.
Middle-class demand sparked
a surge in apartment construction
over the past decade
Number of new apartment units
launched
For Ms. Ray, though, the gray
skeletons of unfinished towers she
can see from her window are a far
cry, she says, from the lush photos
in the promotional pamphlet she
was enticed by a decade ago.
“It seemed so green and
peaceful,” she said. “Now it’s not
green or peaceful.”
(Courtesy: Wall Street Journal)
30 February 2020 | www.smartgovernance.in