Amitabh Kant Committee

Union Ministry of Housing and Urban Affairs had set up a committee in March, 2023.
The committee was chaired by former NITI Aayog CEO and India’s G20 Sherpa Amitabh Kant.
It included officials of the Union Finance Ministry, Uttar Pradesh and Haryana state governments, the Insolvency and Bankruptcy Board of India, the National Housing Bank and the Real Estate Regulatory Authority (RERA) of Haryana and UP.
The committee has submitted its report to the Housing and Urban Affairs Minister Hardeep Puri.

Major Findings of the Amitabh Kant Committee

Stalled Projects:-
- The first question before the committee was how many and where are the legacy stalled projects located.
- The committee’s report cited the Indian Banks’ Association (IBA) as estimating that 4.12 lakh dwelling units of Rs.4.08 lakh crore were “stressed” and about 2.40 lakh (44%) of these were in the National Capital Region.
- Another 21% of the units were in the Mumbai Metropolitan Region.
- The committee concluded that the main reason for the stress in these projects was the “lack of financial viability”, which had led to cost overruns and time delays.
- The committee said the way to solve the problem would be to improve the Internal Rate of Return of the projects in order to attract funding.
- In order to make the projects viable, all stakeholders that is the developers, financiers, land authorities etc. — would have to take a “haircut” or accept less than what is due to them, it said.

Recommendations

Enforce RERA: Ensure the implementation of the Real Estate (Regulation and Development) Act, 2016, which mandates the registration of projects that exceed 500 square meters or involve constructing more than eight apartments under the state Real Estate Regulatory Authority (RERA).
Separate Grant of Registration: Decouple the granting of registration or sub-lease by land authorities to homebuyers from the recovery of dues from developers. This separation can provide relief to homebuyers who are not directly responsible for developers’ financial issues.
Expedite Certificates: Streamline the process of issuing no-objection and completion certificates for projects that are mostly completed but face administrative hurdles. This helps to facilitate project completion without unnecessary delays.
Rehabilitation Package: Propose a rehabilitation package to revive stalled projects. Developers who opt for this package commit to completing the projects within three years. The package includes measures like a “Zero Period” of two years, during which interest and penalties are waived due to the impact of the COVID-19 pandemic. Additionally, developers can involve co-developers to expedite the work, and a “partial surrender policy” allows developers to return unused land to authorities in exchange for a waiver on associated dues.
SWAMIH Fund Modifications: Recommend changes to the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund’s requirements. Modify the minimum Internal Rate of Return (IRR) requirement and first charge requirement to better suit the needs of stalled projects. Additionally, explore options for financing fresh housing loans to potential buyers of unsold inventory from stalled projects.

Implementation aspects of the committee’s recommendations

State Government Jurisdiction: Since many of the recommendations fall within the authority of state governments, it is up to each state to decide whether and how to implement them. The report has been shared with all states, allowing them to make informed decisions on adopting and executing the proposed measures.
Involvement of Ministries: Some of the recommendations require actions by the Union Housing and Urban Affairs and Finance Ministries. This involvement might include revising the requirements of the SWAMIH Fund and developing financing options for new buyers of unsold inventory from stalled projects.

Conclusion

The committee’s report emphasizes the need for a comprehensive approach involving developers, financiers, land authorities, and other stakeholders to address the issues of stalled real estate projects. The success of these recommendations will depend on the willingness of different states and ministries to implement the proposed measures.

MCQs about Amitabh Kant Committee

Question 1: What was the main reason identified by the Amitabh Kant Committee for the stress in stalled real estate projects?

A) Lack of regulatory approvals
B) Insufficient demand in the market
C) Excessive cost overruns
D) Lack of financial viability

Question 2: Which region had the highest percentage of stalled dwelling units, according to the Indian Banks’ Association estimation?

A) South India
B) National Capital Region
C) Eastern India
D) Western India

Question 3: Which act mandates the registration of real estate projects exceeding 500 square meters or involving more than eight apartments under the state Real Estate Regulatory Authority (RERA)?

A) Real Estate (Regulation and Development) Act, 2016
B) Real Estate (Regulation and Registration) Act, 2013
C) Real Estate (Regulation and Compliance) Act, 2015
D) Real Estate (Regulation and Control) Act, 2017

Question 4: What is the “Zero Period” mentioned in the rehabilitation package proposed by the Amitabh Kant Committee?

A) A period of reduced interest rates for homebuyers
B) A grace period for developers to pay pending dues
C) A period of two years during which interest and penalties are waived due to the impact of the COVID-19 pandemic
D) A period during which developers can opt out of the package

Question 5: Who among the following is the chairman of the Amitabh Kant Committee?

A) Hardeep Puri
B) NITI Aayog CEO
C) Narendra Modi
D) Amitabh Bachchan

Read also:- Financial Committees in Parliament