FCC

Revival Plan Proposed for Stalled Real Estate Projects in Noida

2023-08-04

The committee on stalled legacy real estate projects formed by the Ministry of Housing and Urban Affairs (MoHUA) in March has put forward several recommendations. These include the establishment of a "model package" for Noida and Greater Noida, the creation of a guarantee fund to facilitate financing, and the setting up of five fast-track benches of the National Company Law Tribunal (NCLT).

The committee, led by Amitabh Kant, India's Sherpa at G20 and former CEO of NITI Aayog, has already submitted its report to the Ministry, as confirmed by two MoHUA officials. Once the Ministry reviews the recommendations, they will be forwarded to states and union territories for consideration and potential implementation.

One of the key elements of the suggested "model package" for stalled projects in Noida and Greater Noida is the introduction of a "zero period" to account for disruptions caused by the Covid-19 pandemic and court orders. During this period, developers would be exempted from paying interest and penalties. The package also proposes a partial surrender policy that allows developers to relinquish a portion of the land.

Additionally, the committee has proposed the implementation of a "subsidized interest rates or guarantee scheme," akin to the one available for MSMEs, to encourage financial institutions to provide funding for stalled projects. This scheme aims to facilitate the revival of such projects in Noida and Greater Noida and can potentially be adapted by other states as well for their own stalled projects.