Meeting the hue and cry from different sectors over the additional reforms after her maiden budget, Finance Minister Nirmala Sitharaman announced a slew of credit support and corrective steps to boost the purchase of home, vehicles and consumer goods on Aug. 23.
The minister said that the banks have assured they will pass on all rate cuts to MCLR to borrowers. The move will result in benefit for existing home loan customers owing to lower rates. Additionally, with respect to real estate, the government will also establish an organization to provide credit enhancement for infrastructure and housing projects. The extra credit support is expected to bring in some movement in the stalled projects.
The sector has welcomed the slew of measures to revive the economy especially the decision to offer more credit support for the purchase of homes. The stakeholders and developers have hailed the announcement citing it would bring back confidence into the sector.
On applauding the course corrective steps actioned by the government, Dr. Niranjan Hiranandani National President, NAREDCO, reverberates, “The fiscal stimulus announced by FM was to address deeply seeping in liquidity crisis choking economic growth was its foremost priority.
Instant recapitalization of Public sector banks with Rs 70,000 cr announced in the union budget ensures re-opening of the NBFC funding funnel, boosting up the demand for homes along with spurt in fresh loans. Additionally, direct linking up of repo rate directly to home loan rates will aid the home buyers to avail faster and cheaper home loans. This rejigs of spending model by the government is a clear intent to stoke demand and ease bank credit which had hit across the industry acutely.
The curative measures proclaimed by the government demonstrate their responsiveness to execute the action plan in order to kick start India’s cooling down economic growth. FM also highlighted the end of tax terrorism in order to uplift the sentiments of wealth creators in the economy and walk the talk ease of doing business fine print. This economic booster shall go long way to rebuild India Inc.’s confidence index enticing investments back in the capital market and roll on the consumption cycle again.”
Read on to find Dr. Niranjan Hiranandani’s views on recent cut in repo rate.