Developer’s Prime Demand is Rate Cut

December 4, 2008	(1 votes, average: 3 out of 5)  Loading ...
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Cut in interest rate for both developers and home buyers is the first and strongest demand from major developers as part of the bailout package for the real estate industry that the Prime Minister’s crisis committee is working on. Infusion of liquidity in the system is next in rank of demands from the industry as this in turn will lead to more credit flow. “We need further cuts in SLR and CRR so that credit is available readily”, Ramesh Sanka, CFO, DLF reasoned. The cash-starved industry is also finding it difficult to service loans. As a result, it wants an extension of a debt moratorium. “We would like our loans to be re-scheduled by at least one year in view of the present crisis,” said Omaxe executive director (finance) Vipin Agarwal.

Some realty players would also like to get some tax benefits and see section 80 I B of the Income Tax Act restored. However, CEO Ansal API Anil Kumar is not sure about this. “It will be very nice if we could avail section 80 I B benefits but I doubt this happening,” said Kumar. Spending more in the infrastructure sector will help boost the realty sector, thinks Kumar. Another factor bothering the developers is that even though RBI has reduced the risk weightage of real estate from 150 to 100, banks are still very reluctant to lend to this sector. “When we have a piece of land that has licence and all the required clearances, banks are expected to lend promptly.

News Published Under:   Real Estate Developers |

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