No rate cut from RBI will hurt growth, employment generation: CREDAI

The Confederation of Real Estate Developers Association of India (CREDAI) has criticised the Reserve Bank of India's (RBI) decision to keep key policy rates unchanged, saying the status-quo in credit policy would affect the country's GDP growth and employment generation.

In its mid-quarter policy review on Monday, the central bank kept key interest rates unchanged citing elevated food inflation, rupee depreciation and uncertainty over foreign fund inflows.

Criticising the RBI's move, CREDAI Chairman Lalit Kumar Jain said the no-change approach will lead to an irreversible economic slowdown. "This will harm the GDP growth and employment generation," he observed.

The association demanded that the interest rates for developers as well as home buyers should be brought down to boost realty sector, which is facing a slowdown in demand.

Jain said RBI should 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.

"The developers should be encouraged to flood the market with housing stock which will lead to a price check," he added. "The negative weightage 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."