The next set of Relief Measures can be for the Real Estate Sector: MoS Thakur.

By Abhay Shah, Realty Quarter

Minister of State for Finance Anurag Thakur said the government will quickly follow up with its next set of relief measures, this time for the real estate industry.

For multiple factors, including tight liquidity, many builders default, and high property costs, the real estate industry is facing a multi-year slowdown in demand. “The next set of relief measures might be for the real estate industry. Next week, an announcement will come,” Thakur said.

Minister of Finance Nirmala Sitharaman announced on 23 August a set of measures to resuscitate the flagging economy. This included easing regulations on overseas investment, vehicle purchases concessions, and promoting banks to cheaper lending for growth from the spur five-year low.

Thakur also pointed out that the automobile sector has been raising issues concerning the goods and services tax (GST).

“The government is open-minded to listen to industry and taking fast decisions. We will have to look at the other slowdown factors with regard to GST before taking any call,” said Thakur.

Apparently, subdued demand had struck all industries hard. In the middle of one of its worst crises is the automobile sector. The country’s sales of passenger vehicles decreased in April, May, June and July respectively by 17.07%, 20.55%, 17.54% and 31%.

One of India’s most significant factors in the fall of automotive sales was a constant liquidity crunch that could result in more than one million job losses.

The crash of IL&FS by end-2018 resulted in a substantial reduction in the lending of Non-banking finance companies (NBFCs) or shadow banks.

Slowing demand has gone beyond discretionary purchases, with fast-moving consumer goods (FMCG) firms producing soaps, biscuits and other daily essential items reporting gloomy consumer feelings.

India’s gross domestic product (GDP) rose by 5% in April-June 2019, formal data published on August 30 revealed, buffeted by poor household expenditure and shortened corporate investment. In the same quarter of 2018-19, GDP growth was 8%.

The RBI lowered interest rates by 110 basis points this year to increase loans and restart investment in order to tide over a cash crunch in the banking sector.

Following this, the finance minister announced the government’s decision to inject Rs 70,000 crore immediately to recapitalize and encourage state-run banks to lend.