MahaRERA to analyse financial health of projects

MahaRERA chairperson Ajoy Mehta has said the regulator will increase its oversight and analyse developers' annual IT returns to assess the financial health of housing projects. Speaking at the CII Real Estate Confluence, Mehta warned developers that "things are not right" in some of their projects and said project monitoring mechanisms would be initiated. The Maharashtra government has also written to the Centre asking it to increase the annual income cap for economically weaker sections from INR300,000 to INR600,000 under the Pradhan Mantri Awas Yojana in Mumbai Metropolitan Region to make more people eligible for affordable housing.

MUMBAI: MahaRERA chairperson Ajoy Mehta on Tuesday said regulatory oversight by the regulator will intensify and the Authority will analyse annual IT returns by the developers to check the financial health of housing projects as part of its mandate.

MahaRERA to analyse financial health of projects

Mehta’s statement assumes significance as it was made at the 5th edition of CII Real Estate Confluence, an annual conclave on the sector and several top developers were present in the audience.

Mehta said he was a firm believer in putting in place systems to ensure efficiency and regulatory oversight will be strengthened moving forward. “In fact, we have already written to some developers nine months ahead that things are not right in their projects,” he said in a panel discussion moderated by Anuj Puri of Anarock and Neel Raheja.

Mehta had initiated a project monitoring mechanism to closely scan the data on registration pages of projects and sent notices to developers who have utilised a substantial amount of funds without proportionate progress in construction and their completion dates are in December 2023. The Authority has also served second show cause notices to 16,000 projects which did not update the quarterly information about their project finances and construction progress, warning that action will be taken.

He said it was better to check the financial health of projects than wait for the projects to be delayed or lapsed.

Mehta said discussions were on with the government to harmonize the mandates of Insolvency and Bankruptcy Code and RERA to protect the interest of home buyers. He said project-wise resolution of an insolvent real estate company was a more pragmatic option than trying resolve the entire company.

Earlier in the conclave, Additional Chief Secretary, Housing Valsa Nair Singh said the state government had written to Centre to increase the annual income cap for economically weaker sections from ₹3lakh to 6 lakh under the Pradhan Mantri Awas Yojana in Mumbai Metropolitan Region to bring more people into the affordable housing bracket.

In his inaugural address, Dr Praveer Sinha, Chairman, CII Western Region and CEO & Managing Director, Tata Power Company Ltd said India continues to be one of the world’s fastest growing major economies. “As in any growing economy, the Indian real estate sector has been growing in the past decades, and it is expected to reach US$ 1 trillion in market size by 2030.”

Sinha said while the residential real estate sector has been expanding conservatively, the commercial real estate sector has been showing good traction with India’s office market continuing to show steady demand registering a net absorption of around 8.3 million sq ft in Q1 2023, a 67% increase over the same period in 2022.

Dr Sinha said CII and Indian Green Building Council (IGBC) have been spearheading the green building movement for over two decades and has achieved the milestone of 10.22 billion sq. ft. of registered green building footprint with over 10,200 projects adopting IGBC Green Rating Systems. “This has enabled India to emerge as the 2nd country in the world in terms of largest green building footprint,” he said adding CII Western Region particularly accounts for almost 40% of the national green building footprint with Maharashtra in the lead.