Home seekers will definitely gain from affordable housing initiatives, says Niranjan Hiranandani

Niranjan Hiranandani, founder & CMD of Hiranandani Group & Hiranandani Communities and founder president, NAREDCO West, clarifies to DNA Money that the allegation of him being a wilful defaulter is false. He also talks about the effect of demonetization on his and other real estate companies as well as the future of affordable housing, the impact of GST on the sector, among other things.

A few months after demonetization, how do you see the situation in the real estate sector?

From a Mumbai perspective, many of the high-ticket size apartments i.e., apartments priced more than Rs 5 crore, have been struggling even before demonetization and I don't personally see any change due to demonetization from that perspective. In our segment of sub-Rs 3 crore houses, we have had a robust year. While in the month of November customer confusion resulted in deferral of purchase decisions, this January is about as good as last January in terms of sales. Were it not for some customers who have deferred purchase decisions waiting to book after Rera (Real Estate (Regulation and Development) Act) comes into place, the year would have been better.

A recent media report said that your name was in the RBI wilful defaulters’ list and that banks deviated from loan policy guidelines to award you a loan. Was RBI wrong in calling you a ‘wilful defaulter’?

First, I was never a 'wilful defaulter'. I was listed as a past director of Sunny Vista Realtors (SVRPL), a Hirco Plc company. I was certainly not in the wilful defaulters' list (as a director) at the time when banks issued the loan. There was no deviation from the stated policies of the RBI. There was an error in the publication of my name on the list, which was subsequently corrected (as confirmed by Andhra Bank in correspondence) well before any loans were sanctioned to me. So, the media report was incorrect.

Did Andhra Bank in a letter dated December 12, 2015, request Cibil to delete the name of the company and its five directors (including your name as one of the directors) as ‘wilful defaulters’ from the records?

Yes, Andhra Bank’s letter dated 12th December, 2015 requested Cibil to delete the name of the company and its five directors as wilful defaulters from records. I had resigned from SVRPL as director on 15th April, 2011. Well before December 2015, in August 2014 itself, Andhra Bank had confirmed the removal of my name as a director of SVRPL.

On a separate note, what are your views on affordable housing getting infrastructure status?

I believe that township/city development should also get infrastructure status and that is long overdue. I'm pleased that the government is at least starting with affordable housing. The positive from this is developers can access foreign funds at a cheaper cost by way of debt and will be ‘priority sector lending’ for banks. The ‘Pradhan Mantri Awaas Yojana’ and ‘Housing for All by 2022’, both initiatives of the Prime Minister, will get the required impetus, and home seekers will surely gain. The criteria for low cost / affordable housing has changed - from a built-up area of 30 / 60 square metres to carpet area of 30 / 60 sq mt. I still believe, however, that the criteria should be carpet area of 60 sq mt all around because at the lowest end of the income stream - a family of 4 or 5 whether in metro cities or outside - should be given the advantage of the same size homes coming under the affordable sector.

The real estate industry is subject to a host of taxes and duties. How do you see the impact of GST?

GST has the potential to bring about a change in real estate sector. As things currently stand, there is still a lot of clarity that requires to be provided for realty. I also feel that the GST Council should also subsume stamp duties into the GST regime. A few small changes and clarifications can benefit the home buyer enormously.

The government has promised 25 million urban houses and 45 million rural houses by 2022. What is your advice to the government?

Meeting the government’s target of 25 million urban houses and 45 million rural houses by 2022 can become a reality when private sector real estate developers work in sync with the government. The government and private sector real estate developers will need to work together so as to create the townships and smart cities which will encompass the 25 million urban houses and 45 million rural houses.

As ‘Father of the mixed-use township', do you now see realty growth in India?

I believe that the government has figured out that creating 100 new cities, whether smart or otherwise, is extremely important. As a private developer, we created much smaller neighbourhoods (or townships) with the means we had. In our Powai & Thane township, we created world-class templates of what a new Indian neighbourhood could be. In Panvel & Chennai, we have evolved much further, building smart townships with smart infrastructure.

What are your plans for your new initiative, Hiranandani Communities?

Hiranandani Communities will create modern marvels for a resurgent India. It aims at providing housing to the people and showcasing India’s progress in real estate. Hiranandani Communities will offer world-class, eco-friendly and sustainable real estate that will enrich the lives of those who will live in those communities.