The Uttar Pradesh government is poised to unveil a comprehensive rehabilitation package for developers, anticipated to be announced next week, as per sources familiar with the matter. The proposed package is set to encompass a range of measures, including rescheduling and the implementation of zero-period policies, aimed at waiving interest and penalties imposed for financial default.
The initiative is expected to bring relief to homebuyers whose properties have faced prolonged delays, some spanning nearly a decade. Drawing on the recommendations of the Amitabh Kant Committee, the government may introduce a ‘zero period’ and co-developer policies to facilitate the completion of stalled projects.
Sources indicate that these policy decisions are likely to receive approval during the Uttar Pradesh Cabinet meeting scheduled for November 28. Following the Cabinet’s nod, an official announcement regarding the rehabilitation package is expected.
Considerable progress has been made in evaluating the Kant panel report and reviewing observations submitted by three development authorities in Noida, Greater Noida, and the Yamuna Expressway. A final report, the result of numerous high-level meetings, is prepared. The government, however, is still deliberating on whether to delink the registry of flats from the payment of land dues by builders.
Notably, an estimated two lakh homebuyers are eagerly waiting to register their units, facing delays due to outstanding dues from builders. The government is contemplating providing a four-year zero period to developers in the proposed package, particularly for projects disrupted during the COVID-19 pandemic and those impacted by the two-year National Green Tribunal (NGT) ban on projects within a 10-kilometer radius of the Okhla Bird Sanctuary.
However, offering a zero period would lead to a substantial revenue loss for the three development authorities. Collectively, they may have to forgo around Rs 14,400 crore, with the Noida Authority potentially relinquishing about Rs 7,400 crore, the Greater Noida Authority approximately Rs 6,000 crore, and the Yamuna Authority facing a loss of Rs 1,000 crore.
The development authorities have submitted reports outlining the financial implications of proposed measures such as the ‘zero period’ and delinking of registries from builders’ dues. Real estate developers currently owe approximately Rs 46,000 crore to development authorities in Gautam Budh Nagar, with Rs 26,000 crore owed to the Noida Authority, Rs 14,000 crore to the Greater Noida Authority, and Rs 4,700 crore to the Yamuna Expressway Authority.
In March 2023, the central government established a 14-member panel led by former NITI Aayog CEO Amitabh Kant to address the challenges faced by stalled housing projects. The panel proposed a moratorium on payments owed by builders to land-owning authorities, provided that they clear their dues in stages, emphasizing reasonable interest rates and prioritizing project completion. The committee also advocated for allowing co-developers to participate in the revival and completion of stalled housing projects.