Govt gives a Rs 70,000-cr boost to real estate, exports

The Centre on September 14 announced a Rs 50,000-crore fund for exporters and another Rs 20,000 crore to finish stalled affordable housing projects that will benefit 3.5 lakh home buyers across the country.

It also relaxed norms for overseas borrowing for affordable housing sector. However, the announcement — that left a major chunk of bankruptcy-bound housing projects untouched — was immediately criticised by the real estate sector, which said the government has solved only 5% of the problems plaguing the housing sector.

The Opposition Congress called it “cosmetic” and “piecemeal”.

The government will contribute Rs 10,000 crore in the affordable housing fund while the rest will be contributed by LIC and other sovereign funds.

“The focus is on affordable housing,” Finance Minister Nirmala Sitharaman said, announcing her third stimulus in the space of less than a month.

The fund will, however, not cover the projects affected by bad loans and stuck in bankruptcy courts. Home buyers, who are most affected by developers defaulting in completing their housing projects on time, will have to get relief through NCLT (National Company Law Tribunal).

Deloitte India partner K R Sekar said, “Announcements are welcome but the government needs to come with a mega push for infra and real estate sector which would incentivise job creation and create domestic demand.”

On the export front, the minister announced measures for tax refunds to exporters under the World Trade Organisation (WTO) compliant rules. The new scheme, called the Remission of Duties or Taxes on Export Product (RoDTEP), will more than adequately incentivise exporters than the existing schemes, the minister said.

Sitharaman said priority sector lending (PSL) norms for export credit have been examined and are under consideration of the Reserve Bank of India (RBI). Once relaxed, it will release an additional Rs 36,000 crore to Rs 68,000 crore as export credit under priority sector.