Shooting a sign that a big boost to the realty sector may be on the cards, Finance Minister Nirmala Sitharaman on Tuesday stated that the government and the Reserve Bank of India (RBI) are in the process of solving the issues faced by the real estate sector.
“The government is working together with the RBI to see how best we can tweak the existing norms wherever necessary to help the realty sector,” she said at an NSE event, without categorically spelling out what this could mean. Sitharaman also admitted that the issues facing the real estate sector had not been addressed adequately, which is a cause of interest since it has a spillover impact on many sectors.
Since August, the government has been taking several steps to strengthen the market and consumer demand, the FM said. Recently, the government cut the corporate tax rate to 22%, which involved an outgo of Rs 1.45 lakh crore.
Real estate developers are finding it difficult to raise funds after the default by the IL&FS group that triggered a liquidity crisis in the economy. This was aggravated by the economic slowdown, which at one hand caused huge inventory pile-up due to a shortage of demand and also brought continuing projects to a halt due to lack of funds.
“There are many alternative funds which are now approaching us, saying we would like to do something with you as long as some supporting mechanism is available for reviving the realty sector,” she said.
The Finance Minister said that home buyers are looking up to the government to help develop the delayed projects through policy decisions.
In September, Sitharaman had announced the creation of a Rs 20,000 crore special fund to provide funding to the hampered affordable and middle-income housing projects in the country.