Developers Reaction on RBI Monetary Policy

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Mr. Manoj Gaur, President CREDAI NCR and MD Gaursons India Ltd. said, “It was an expected move that RBI will keep the rates unchanged in this bi-monthly policy. Rising inflation is a reason; RBI is holding back the rates and maintained status quo. The upcoming budget is also being considered a reason for RBI to adopt a wait and watch approach. The annual budget will throw light on microeconomic matters which is significant to decide if the there is a scope of rate cut in future. Structural reforms in the budget will give more space to monetary policy for growth by the end of the current financial year. However, we were looking for some more reduction in interest rates as a rate cut would have boosted the demand in housing sector.”

Mr. Deepak Kapoor President, CREDAI Western  UP said,” A cut of 25bps was expected as RBI was approaching the end of rate cut cycle. It has been done after wait and watch policy few days before the budget in the coming quarter. A cut of 25 bps was possible as economic indicators such as fiscal deficit is under control, oil prices are already down, GDP growth rate is as expected and the inflation is in control. Although the real estate sector did grow after the last cut but we feel that the growth remains weak and a rate cut would provide an additional impetus towards the recovery of the sector.  We would also request the RBI to push banks to lower the interest rates as benefits of previous cuts have not reached the customer fully.  We are also expecting a cut in the next policy review as a lower interest rate is important for the growth of the sector”.

Mr. Prashant Tiwari, Chairman Prateek Group said, “Maintaining status quo is a missed opportunity for real estate sector as reduction in rates might have improved the market scenario and triggered the demand and sales process. Still, in the longer run we foresee enough room for more rate cuts which would spur growth in realty market. Real estate sector being a major contributor to India’s GDP needs enough backing from RBI to give out positive signals considering the present property rates and stagnant market conditions.”

Mr. Gaurav Gupta, General Secretary, CREDAI Raj Nagar Extension said, “One of the reasons Reserve Bank has kept the rates unchanged is to keep inflation under control. While, RBI has given more than enough rate cuts in the previous year and forthcoming budget is also being eyed to get cues about the economy. Therefore, keeping the rates untouched was a very much predictable move. The current instability in market and reluctance of banks to pass down the rates to borrowers may also be a reason for RBI to leave the rates unchanged. This is a kind of recovery path being followed by the central bank and if things work well we can expect rate cut in the next policy itself.”

Mr. Sanjay Rastogi, Director, Saviour Builders Pvt. Ltd. said, “The realty sector was looking forward for rate cut as inflation is not very much worse and crude oil prices are also coming down. Any cut in rates would have given sufficient boost to the sector facilitating growth and building up customer’s confidence. Controlling inflation may be a long term goal of the government but bringing down rates might have infused positive vibes in the realty market which is already undergoing recovery phase.”

Mr. Anil Kumar Tulsiani, CMD, Tulsiani Constructions and Developers Pvt. Ltd. said, “RBI already slashed down 125 basis point in the previous year and so to keep the rates unchanged was a very much anticipated and a balanced move. RBI is also waiting for the fiscal roadmap to be presented in the forthcoming budget which would affect the further course of action of government. We are hopeful that RBI will take effective measures to aid the process of growth and development of all the major sectors including real estate. Furthermore, lending banks also need to take initiatives to ease the burden of home buyers and pass on the benefits of earlier rate cuts to borrowers.”

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