Govt’s new measures to boost housing not enough: Experts

The government on Saturday announced the setting up of a corpus of Rs 10,000 crore for the cash crunched real estate sector to complete stalled housing projects. This special window will provide last-mile funding to housing projects that are non-NPA and non-NCLT.

Although the real estate sector has welcomed the government’s move, the majority of the housing projects that are non-NPA and non-NCLT will not benefit from this move, industry experts pointed out.

"This is a major boost to the housing sector (affordable and mid segment) and a perfect festive treat for lakhs of homebuyers who have been anxiously waiting for their prized possession. However, since it doesn’t include projects that are under NPAs and NCLT, there is a possibility that not all homebuyers will get the said relief," said Anuj Puri, Chairman, Anarock Property Consultants.

“Also, the fund is for projects in the affordable and mid segment housing only and to this effect homebuyers within the luxury segment may have to wait even further. Also, there is no clarity of the price of mid segment homes that will be included in this move, he added.

According to Anarock Property Consultants, as many as 560,000 homes worth of 4.5 trillion rupees are stuck or delayed across the top seven Indian cities. These stalled projects are at the center of slowdown in the country’s property market and key reason for mounting default risk of developers.

The measures announced by Finance Minister Nirmala Sitharaman are the latest in a series of steps announced to boost consumer demand and attract investments. In the April – June quarter India’s GDP grew by just 5%, the lowest in six years and much lower than 8 per cent growth registered in the same quarter last fiscal, hinting at a slowdown in the economy. To boost exports, the finance minister announced measures that would address comprehensively tax and duties refunds for exporters, improve credit flow to the export sector and the launch of a special free trade agreement (FTA) utilisation mission.

Despite a weaker rupee, exports has dropped for two of the three months upto August 2019. A weakening global economy and the US China Trade war are the main reasons behind India’s falling exports.

These measures will provide some fillip to the exporters, but is not expected to be a game changer, experts said. These measures will cost the government an additional 90 billion rupees a year. The new program will involve existing export incentive for which the government has already factored in a revenue hit of Rs. 410 billion in July.

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