With little to no economic activity taking place, EMIs and loan repayments have taken the center stage.
As businesses shut doors due to the Coronavirus pandemic and the economy slows down further, demand surge has taken a detour in India. With little to no economic activity taking place, EMIs and loan repayments have taken the center stage. Industry bodies are suggesting that loan repayments and EMIs be deferred for at least 6 months or maybe a year. Niranjan Hiranandani, Founder-Chairman Hiranandani Group and President ASSOCHAM, in an interview with The Indian Express said that suggestions in this context have been made by ASSOCHAM. “Suggestion made by ASSOCHAM and similar industry bodies is that EMIs and such loan repayments should be deferred for a period of six months to a year. The hope is that this will be given due priority by the authorities,” he said.
In the fallout of the lockdown imposed on the country, the real estate sector is now bound to witness further reduction demand and delay in ongoing projects. The Hiranandani group Director said that the real estate sector, if not rescued, will be badly hit post the Coronavirus pandemic. Further he said, “All segments of real estate will witness a slowdown, in terms of new demand as also completion of ongoing projects. Post Covid-19 pandemic, things will totally change.” Construction sites are not operating under the 21-day lockdown imposed by the government taking a toll on construction workers as well. Hiranandani said that the situation in terms of workers is fluid and keeps changing on a day-to-day basis. There are more than 25,000 projects registered under MahaRERA Act, he claims, among these some are in the planning stage while some are in the mid-section stage. “If we talk about figures across the country, more than 2 lakh real estate projects are at halt due to this outbreak.” Hiranandani said.
As the virus takes a toll on housing, a cascading effect on the steel and cement industry is being expected. However, Hiranandani went on to claim that the global breakout of Coronavirus will bring the ‘Make In India’ initiative into focus. “Tata Steel was mentioned in media reports as looking at Turkey and Brazil as alternatives to China as a source of imports. Other Steel makers have spoken about creating production facilities and also ramping up production facilities. It is a similar situation when it comes to cement. The Indian economy will see a reboot, and many of the troublesome aspects may end up being history. I have positive expectations,” he added
The Coronavirus pandemic for the Indian economy as a whole, according to the Real Estate Mogul is a ‘double whammy’. He said that the Coronavirus, unfortunately for India, came at a time when the country’s credit environment was already fragile and the economy was slowing down, making it a double whammy for the country. In terms of unemployment, Hiranandani thinks that the scenario is beyond challenging, while adding that there are no figures to go with as of now. “Beyond that, if the economic stimulus and related measures from the government cushion the shocks, fine. Else, unemployment and also losses will the economy in a major way.” he added.