Even as housing and automobile majors hailed RBI’s decision to cut key interest rates, experts said it will have a minimal impact on EMIs and the central bank needs to reduce rates further to actually translate it into big gains.
Sugato Sen, deputy director-general, Society of Indian Automobile Manufacturers (SIAM), said it was not enough as “the 25 basis points reduction is not going to have any impact on the EMIs.”
“We expect rates to further come down in the next few months and banks to reduce lending rates,” he added.
Rakesh Srivastava, senior vice-president, sales and marketing, Hyundai Motor India Ltd, also added that “the company is looking forward to further reductions and initiatives on the ease of getting finance, which might help in demand upswing.”
Real estate industry executives also said they expected more cuts before the sector actually sees a revival.
“The rate cut is too little for consumers as it has a limited impact on EMIs, said Rajeev Talwar, executive director, DLF group. “This raises hopes for buyers for a further rate cut in upcoming monetary policy reviews, which will later build confidence for buyers to fuel demand,” he added.
“The reduction in the base rate is an important step in improving buying sentiment. Demand pick-up will happen only if rates are further cut down which would make lending affordable for both the buyers and the developers,” said Anshuman Magazine, chairman & MD, South Asia, CBRE.
“The current rate cut will help only building the market sentiment, which is very timely,” said Anuj Puri, chairman, global property consultant JLL India.