The real estate sector can’t depend on subsidies alone for its survival, but should rather orient itself around market economy, Union finance minister Arun Jaitley said on Saturday.
“The real estate sector should survive on market economy, subsidies should not be the essence of survival for the industry,” he said at a conclave organised by CREDAI. He was hopeful that the age of slowdown will end and the sector would be the next big mover for the Indian economy.
The Indian real estate, which had been hit by high interest rates that kept purchasers away for almost two years, is now seeing a perk in demand due to softening of rates. Real estate developers have been petitioning the government to address issues related to circle rates and taxation.
Jaitley said that interest rate hardening had impacted the realty sector adversely in the last few years. But it was a pre-requisite that inflation was kept under control for a sustained period of time and now that it had been achieved, interest rates had started coming down, bringing down the cost of funding.
“We can look back with a sense of satisfaction that over the last one year, the RBI has also at least on four occasions taken positive steps as far as rates are concerned. Hopefully, this movement is there to stay and in the current global price structure, we are able to keep inflation under control,” said Jaitley.
He also reiterated that India remained among the fastest growing economy, but the global macro environment was not helpful.