Amid the ongoing real estate slowdown, State Bank of India (SBI) Chairman Rajnish on Wednesday said that it’s not right to always ask the government for help, especially when the problem is created by the builders.
Amid the ongoing real estate slowdown, State Bank of India (SBI) Chairman Rajnish on Wednesday said that it’s not right to always ask the government for help, especially when the problem is created by the builders. The current issues need to be solved by the industry itself, Rajnish Kumar also told CNBC TV-18 at the India Mortgage Leadership Conclave 2019. “The problem is not created by the govt, but by builders. Why would the govt set it right?”, he said. On finding ways to help the struggling sector, he said that there is a need to improve its affordability so as to help it recover. Construction is a costly affair owing to higher land costs and other taxes, Rajnish Kumar noted. Adding, he said that the taxation structure for the real estate sector is not favorable.
On the rising inventory of unsold houses, Rajnish Kumar said that there is a pick up in sales in cities such as Hyderabad and Kolkata, even as Delhi-NCR areas remain the worst affected. The government in September this year announced Rs 20,000 crore fund to fund to help real estate developers complete projects that are stuck on account of ‘last mile’ cash shortage.
Finance minister Nirmala Sitharaman said a “special window” will be set up to “provide last mile funding for housing projects which are non-NPA and non-NCLT projects. “Rs 20,000 crore is a significantly amount for the realty fund. If Rs 10,000 crore comes from govt, it may not be too tough to get the same from private players,” he said.