New Delhi: Hinting at a big boost to the realty sector, Finance Minister Nirmala Sitharaman Tuesday said that the government and the Reserve Bank of India (RBI) are in the process of resolving the issues faced by the real estate sector.
She said that real estate has a spillover effect on many sectors, hence addressing its issues will benefit industries such as cement and steel, who are the major suppliers.
“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.
However, she did not spell out what the measures would be.
Sitharaman also admitted that the issues facing the real estate sector have not been addressed fully. Since August, the government has been taking various steps to revive the market and consumption demand, the minister said.
Recently, the government cut corporate tax rate to 22 per cent, 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 lack of demand and also brought ongoing projects to a standstill 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 complete the stalled projects through policy decisions. In September, Sitharaman had announced the creation of a Rs 20,000 crore special fund to provide financing to the stalled affordable and middle-income housing projects in the country.