Naredco's UP chapter seeks tweaking

New Delhi Realtors body Naredco's Uttar Pradesh chapter has demanded that the government should suspend the provisions of insolvency law for one year to protect cash-starved builders on view of a second wave of the Covid-19 pandemic. Naredco UP Chairman R K Arora has written a letter to Union Finance Minister Nirmala Sitharaman seeking suspension of the IBC (Insolvency and Bankruptcy Code) provisions for one year to protect the corporate entities considering the unprecedented second wave of Covid-19. He said the new sales and collections from old sales have been badly hit, leading to severe liquidity crunch in the industry. Arora said the relief has been sought to overcome this distressed market scenario and to protect the real estate industry, which is reeling under "acute liquidity crunch" due to the Covid-19 outbreak. He said similar relief was given last year. "Ministries of Finance and Corporate Affairs may please intervene and once again introduce special measures to protect corporate entities that have witnessed a sudden halt in operations and consequently defaulted on their repayment obligations, from being dragged into insolvency by suspension of the applicability of Section 7, Section 9 and Section 10 for a period of one year," Arora said in the letter. He said the outbreak of the second wave has hit the real estate market, which had started showing some signs of recovery. The second wave is "far more fatal and derailed the recovery process completely", he added. Arora said it is expected that the construction will suffer for another next six-eight months at least, and even after that, it will take time to restore the material supply chain, re-mobilisation of manpower and machines.