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New Delhi, Oct. 25 Parsvnath Developers has asked the Government to take immediate steps to restore liquidity in the real estate sector, and warned that the company would soon retrench “non performers” as part of cost-cutting measures in 15-30 days.

The mood in the real estate sector has been sombre due to the prevailing slowdown in demand and ongoing liquidity crunch, and even companies such as Unitech – which maintain that sales in affordable housing segment are robust – have dished-out lower increments compared to last year.

“There is a need for an additional 200 basis point cut in both CRR and the repo and reverse repo rate. We do not want a bail-out, but given the extent of global liquidity there is a need to infuse liquidity in the system. The lending has almost frozen,” the Parsvnath Chairman, Mr Pradeep Jain, said on the sidelines of a CII event.

Asked if the company would hand-out pink slips to further cut costs, he said, “We have not decided anything. But the non-performing staff has to go, the positions will be filled with strong professionals, who are currently available in the market,” he said adding that Parsvnath had 1,400 people on its rolls.

Mr Jain said the Diwali sales had been 40-50 per cent lower this season compared to last year, and investors had clearly exited the market.

The Unitech Managing Director, Mr Sanjay Chandra, ruled out any lay-offs in his company, but admitted that the increments this year were lower than last year.

“Last year, we gave increment of an overall 28 per cent in two tranches.

“This year, we have given one of 15.5-16 per cent and there are no plans for a second one. This is due to the slowdown in the market,” Mr Chandra said adding that the Group was adding 100 people a month but largely for telecom operations.

Mr Chandra also clarified that the company had not “defaulted” on payment for land bought from the Greater Noida Development Authority.

“We are not in any default. We have six projects in Greater Noida, of which in case of five projects, the construction is in full swing. Only in one case we have not got a peaceful possession due to agitation by farmers. We have asked the authorities to revise the payment schedule and it has been revised accordingly,” he added.

He said while the luxury housing segment had slowed down, the sales in the affordable housing had picked up.

The Cushman & Wakefield’s Executive Managing Director, Mr Sanjay Verma, said the liquidity squeeze could trigger delay in construction and also impact realtors’ ability to meet obligations on exposures taken on land.

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