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Construction : Exclusive Report | May 2013 | Source : Construction Update

Monetary Policy 2013 - Brotin Banerjee, MD and CEO, Tata Housing

"It's a very limited cut as against industry expectations but is in conformity with RBI's cautious stance given the likely resurgence of inflation risks. Rate sensitive sectors like real estate were definitely expecting RBI to be more aggressive in easing the monetary policy. Minimal rate cut and an unchanged CRR will leave limited scope for reduction in bank lending rates which is imperative to improve the housing demand and affordability for millions of home seekers. Although, the central bank has stressed upon limited scope for further easing, it has maintained that it will manage liquidity to ensure credit flow to productive sectors. This is good news for the real estate and construction sector which faces a perennial liquidity crunch due to external factors. On the up-side, recognition of policy action needed to address bottlenecks, improving governance and stepping up public investment is a big positive, especially for affordable housing where perpetual delays result in pricing pressures across the value chain."
 
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