MUMBAI: Finance Minister Piyush Goyal has summoned top bankers including State Bank of India Chairman Rajnish Kumar and HDFC Chairman Deepak Parekh to work out a plan to revive the sagging real estate industry that provides the highest employment after agriculture amid rising chorus on jobless growth, said two people familiar with the matter.

Secretary Hasmukh Adhia, NITI Aayog chief Amitabh Kant, and the CEO of National Housing Bank (NHB) Sriram Kalyanaraman are among the officials who would discuss ways to facilitate higher flow of funds to the industry that’s crippled by the formalisation of it ending decades of its transactions conducted under the radar.

The meeting is called to “discuss critical issues and possible measures to boost the real estate sector,” says a letter from the Finance Ministry.

Real estate which for long been funded by unaccounted money from tax evaders is facing its worst strain after the 2016 demonetisation and the implementation of the Real Estate Regulation Act which lays down strict norms on use of funds from home buyers and reduces the leverage available for builders.

Parekh of HDFC in a recent letter to shareholders called for the NHB to permit funding of land by housing financeNSE -0.90 % companies ending years of conservatism in lending to the sector which itself some blame for the flow of tax evaders’ money. Real estate industry is estimated to provide employment to as many as 5 crore people until 2017.

“The aftershocks of multiple disruptive policy reforms and structural changes continue to ripple through the Indian real estate sector,’’ says Shobhit Agarwal, MD & CEO of Anarock Capital.

“While its visible transformation from unorganized to organized and opacity to transparency are indubitably positive, we cannot help but count the fatalities of this process.”

Real estate prices across top seven cities have been stagnating in many cities for the past 2-3 years.

The housing prices gauge, the housing index of the NHB – a composite housing price index of 50 cities. This index was at ‘127’ in March-18, growing from ‘113’ in March-15 led by demand in teir II and tier III cities.

Mortgage companies’ regulator NHB has also been taking measures to improve the state of the real estate industry.

Recently it decided to give guarantees to bonds sold by housing finance companies that would bring down costs for them and in turn for the ultimate home buyers

Source : Economic Times