A high-level committee of the Uttar Pradesh Government has come out with recommendations that are aimed at providing a solution to the completion of homes in the stalled projects of Noida, Greater Noida and Yamuna Expressway.
The committee, chaired by Durga Shankar Mishra, the Secretary in the Ministry of Housing and Urban Affairs (MoHUA), was formed by the state government through its order dated June 18, 2018, to address the issues of home buyers and affected parties of Noida, Greater Noida and Yamuna Expressway.
1. Identifying the ‘lack of fund’ and ‘non-availability of last mile funding’ as the main reason for the stalled projects, the committee’s first recommendation pertains to the Reserve Bank of India (RBI) for issuing guidelines to enable the banks to consider additional funding to complete the projects.
The RBI circular dated February 12, 2018 had put restrictions on additional funding in incomplete stalled housing projects by classifying the loans as NPAs.
2. The second recommendation pertains to Last-In-First-Out (LIFO) model for execution of stress fund to ensure the confidence of investor to put its money in order to complete the stalled projects, as currently, nobody wants to put money installed projects considering there is no guarantee of a return on their investment.
3. The committee has recommended introduction of Project Settlement Policy (PSP) by UP state government with certain modifications. The PSP was launched earlier by the authorities but no developer had availed the same. However, since the situation is more critical now than before, PSP for fixed 6 months’ period has been recommended, where the developer would have to give a written undertaking to complete the projects within 3 years, otherwise the benefits of PSP shall be taken back and all the dues shall be recovered from developer by the concerned authority.