The Indian economy needs liquidity as fuel to power the growth engine: Niranjan Hiranandani, National President, NAREDCO.
India Inc. got positive news as regards a rate cut in the first monetary policy of the current fiscal, on 04 April 2019. The need for flexibility with the evolving situation in India, given that both, inflation and growth have slowed, was reflected in the RBI’s move. Economic growth weakened to 6.6 per cent at end-2018, the slowest in five quarters; while annual retail inflation was low, at 2.57 per cent in February following five months of deflation in food prices.
The sentiment in India Inc. is that from the Monetary Policy Committee (MPC) of Reserve Bank of India (RBI) having granted the 25 basis points (bps) rate cut in today’s policy review would be followed by another 25 bps in the near future. The Indian economy needs liquidity as fuel to power the growth engine. The RBI move is expected to lift industry sentiments, as also provide relief to various stakeholders like corporates as also in real estate, home buyers. We expect that banks further pass down the benefit for the rate cut to the home buyers which shall further trigger the home buying in to the actual sales.
Repo rate cut is the perfect start to new financial year: Anuj Puri, Anarock
As hoped for, the RBI has reduced the repo rate by another 25 basis points. Back-to-back repo rate cuts by the RBI are indeed the perfect start to a new financial year, resulting in overall reduction of 50 basis points since February 2019. The repo rate now stands at 6% – returning to the same level as in April 2018. This will augur well for the Indian real estate sector and keep the momentum going in the coming year.
As it is, the sector already saw an uplift in homebuyer sentiment due to the multiple sops offered by both the Government and the RBI in just the first three months of 2019. These measures have contributed to a 12% increase in housing sales in Q1 2019 across the top 7 cities.