CREDAI chief warns of irreversible economic slowdown

Criticizing the Reserve Bank's status quo credit policy, realtors apex body CREDAI Chairman Lalit Kumar Jain sounded a note of caution that the no-change approach will lead to an irreversible economic slowdown.

"This will harm the GDP growth and employment generation," Mr Jain, who is also the Chairman and Managing Director of Mumbai-Pune realty major Kumar Urban development Limited (KUL), said.

Pointing out the capital and labor-intensive nature of real estate sector, Mr. Jain requested the RBI to make a policy to encourage construction of mass housing instead of stifling its growth with credit squeeze and unaffordable rates of interest for both the developer and the buyer.

"No economy in the world can afford job cuts which can lead to massive law and order problems, as it is happening in some countries," he said.

"The developer community should be encouraged to flood the market with housing stock which will lead to a price check. Else, the prices will continue to be high and the government's policy on affordable housing will merely remain on paper," Mr. Jain said.

CREDAI - with over 10,000 developer members, pan-India has been campaigning for realty reforms, including bank policy changes. "The negative weight-age given by RBI to the sector is forcing the developers across the country to go for high-cost non-bank funding that adds up to the high cost of inputs," he added.