Real estate sector will pick up again, says Jaitley

Union Finance Minister Arun Jaitley on Saturday expressed the hope that the Reserve Bank of India (RBI) would continue to cut key policy rates, as the inflation has been brought under control.

“The essence of the real estate industry cannot be that you can only survive on subsidies”.

The finance minister said the government had taken steps to help the lagging industry, and that subsidies can not sustain growth. Real Estate sector is facing trouble for the last three years with sales at an all time low and unsold inventory at an all time high. “Now something needs to be done on stalled projects and most important is to improve the health of the power sector”, he said at the Credia-Bankcon summit here.

The finance minister said the real estate sector is going to be next driver for economic growth.

“Hopefully, this movement is there to stay and in the current global price structure, we’re able to keep inflation under control”, Jaitley said.

Jaitley said now the banking sector itself is facing challenges, particularly the public banks.

About the taxation proposals made by CREDAI, he suggested to the Real Estate body to make a presentation before the newly appointed committee reviewing the Income Tax Act. The distribution companies in a few of the states have been in distress. Banks can not indefinitely fund them in order to subsidise consumers for their political reasons and therefore not only the discoms owe money, the power producing companies also feel distress because nobody is buying their power and very soon we will be addressing issues regarding the power sector, Jaitley added.