Monetary Policy: Realty sector unhappy

Real estate players and industry watchers say an interest rate cut could have triggered housing sales. The Reserve Bank of India on Tuesday left its benchmark rate unchanged saying it still needs more proof that inflation is under control before it can start lowering lending rates.

Pradeep Jain, Chairman, Parsvnath Developers said, "RBI should understand that curbing inflation at the cost of growth is not a wise step. It should stand up and cut the rates in its next review to pump fund into the economy, and the real estate sector in particular, which is one of the major contributors to the GDP."

Lost opportunityAnshuman Magazine, Chairman and MD, CBRE South Asia said, "For the real estate industry, the move may be seen as a lost opportunity. A rate cut at this juncture could have been the trigger for housing sales."

Expressing disappointment at the RBI's monetary policy, CREDAI Chief Lalit Kumar Jain, has called for government intervention to facilitate low-cost funding for real estate developers and buyers.

"For a long time the RBI has been consistently taking steps that do not encourage real estate sector despite the well recognised fact that the industry contributes handsomely to the country's GDP," he said.

Samantak Das, Chief Economist and Director, Research, Knight Frank India said, "With the recent sales in the real estate sector remaining subdued, stakeholders were hoping for a rate cut to initiate tractions in the market. However, given the current scenario of high optimism along with economic fundamentals falling in place, the RBI may look at testing the sustainability of the economic progress for one more quarter."