There could be a big bonanza coming up for the real estate sector soon. Finance minister Nirmala Sitharaman on Tuesday indicated the government is working with the Reserve Bank of India (RBI) to undertake measures to alleviate the pain in the cash-strapped and debt-laden sector.
The government is very keen and is working clearly “with the RBI to see how best we can, where necessary, tweak the existing norms to help the people who are affected in the realty sector”, Sitharaman said at an event marking the silver jubilee celebrations of the National Stock Exchange.
After the tumultuous aftershocks of the Union Budget in July, the government has been on an overdrive to address stock market jitters and assuage investor concerns. India Inc. has applauded the recent tax reforms which include the reduction in corporate tax to 22%. The tax relief of close to Rs 1.3 lakh crore has helped revive business confidence.
Sitharaman admitted that the real estate sector has been excluded from the various measures introduced by the government to revive consumption demand and financial markets. “One particular sector which I have not touched but which has a lot of positive impacts and also can affect the stock market is the real estate sector,” she said. “The real estate sector requires a lot more attention as the sluggishness needs to be addressed.”
The finance minister said that many alternative investment funds were keen to plough money into the real estate sector but sought firm policy support from the government for more clarity.
“There are many alternative funds which are now approaching us, saying we would like to do something with you all so long as there is some supporting mechanism available for reviving the realty sector,” Sitharaman said. The participation of funds would also address the plight of many homebuyers, she added.
The liquidity crunch stoked by the debt crisis at Infrastructure Leasing & Financial Services in September last year was the last straw to break the real estate sector. The sector had been hit by demonetisation in November 2016, GST rollout in July 2017, and the introduction of RERA in May 2017.