Nirmala Sitharaman to explain Rs 20 lakh crore economic package today at 4 PM

Finance Minister Nirmala Sitharaman will today explain the Rs 20 crore economic package announced by Prime Minister Narendra Modi yesterday at 4 PM.

Nirmala Sitharaman

The Rs 20 lakh crore economic package is said to be aimed at all the sections of the society.

Sharing his expectations on the announcement followed by the explanation,  Shishir Baijal Chairman & Managing Director, Knight Frank India said , “The PM announcement of Rs 20 lakh crore stimulus package is much required at this point and the real estate sector is eagerly awaiting details of the package. Real estate, which was limping back to recovery has been hit hard by the COVID – 19 crisis, and the industry players are hoping that the package details announced by the FM will include some meaningful stimulus for the sector. Credit squeeze and weak demand are the two main concerns facing the real estate sector.”

“RBI has already been injecting liquidity into the system, but the more critical aspect would be for the banks and NBFCs to start lending. Support to the banking sector in the form of immediate and meaningful capital infusion by the government will help push up credit growth in the economy. Further, post recapitalization, the banks should look at a one – time restructuring of developer loans. Moreover, in this period of uncertainty and risk aversion, Government’s credit guarantee for NBFCs/HFCs lending to real estate will help this beleaguered sector tide over it credit squeeze. The Government should also provide further credit guarantee for bank lending to NBFCs/HFCs,” he added.

“The other critical aspect would be measures to boost demand for real estate sector.  In these difficult times, the government should look at temporary reduction or indeed waiving of GST rate for the real estate sector. Further income tax benefits for home loans will also help support demand for housing and help achieve government’s objective of Housing for All,” said Baijal.

“Stimulus for real estate sector revival will have a strong multiplier effect, in the form of boost in demand for sectors like cement, steel and many other ancillary industries. More importantly, support to the real estate sector will help absorb labour force at a time when the economy is struggling with high unemployment rates. Supporting the real estate sector is also critical for maintaining the health of the financial sector that has a huge exposure to the real estate sector. Broadly, revival of the real estate sector will strongly aid the revival of the economy,” he said.

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