New Delhi, India Inc has lauded the central government’s third round of stimulus package which ranged from collateral free credit for stressed sectors to support for employee’s provident fund for a period of two years.
Sangita Reddy, President of FICCI said: “We saw a powerful multi-sectoral boost coming in from the government today. The clear focus on housing, infrastructure and construction shows that the government wants to leverage the huge multiplier impact these sectors have to rev up the economy that is already showing multiple signs of recovery.”
Describing the package as Diwali bonanza, Reddy said that the measures will lift growth, employment, exports and make India part of the global value chains.
The President of PHD Chamber of Commerce and Industry, Sanjay Aggarwal, said that the reforms will have a multiplier effect on the economic growth trajectory through enhanced demand, job creation, increased private investments, escalated exports and growth of sectors that have strong backward and forward linkages.
“The recovery in the key economic and business indicators on the back of series of stimulus announcements by the government in last 7-8 months, totalling to around Rs 29.9 lakh crore, will go a long way in our fight against the pandemic impact of Covid-19 on trade, industry and economy,” he said.
Niranjan Hiranandani, President of NAREDCO and ASSOCHAM said that the increase in differential limit between circle rate and agreement value has removed a major “stumbling block for price rationalization”.
Funding issues have been a major challenge for real estate.
Finance Minister Nirmala Sitharaman’s announcement, about additional funding of Rs 18,000 crore for PM Awaas Yojana-Urban will add to the sparkle this festive season, Hiranandani said.
Applauding the Centre’s measures, Apparel Export Promotion Council’s (AEPC) Chairman A. Sakthivel said that the world will see emergence of a new India post Covid-19.
“Both extension of ECLGS till the end of the current fiscal and increase in outstanding credit limit have been our demand and we thank the government for the comprehensive relief. This will go a long way in propping up many of the struggling industries,” Sakthivel said.
On the announcement to support the real estate sector, Bhushan Nemlekar, Director, Sumit Woods Limited said that the central government has taken a step in the right direction.
“I hope we see improvement in sales in the next one year. This income tax incentive will stimulate demand for buying homes. This is a welcome move and we are optimistic that the government will introduce more proactive steps for giving additional relief to boost the real estate industry,” he said.
Hemant Krishna, Joint Partner with Lakshmikumaran & Sridharan Attorneys, however noted that although incentives and stimulus packages are necessary, they offer their gains do not last long.
“Therefore, the emphasis should now shift to transforming the economy through deeper, systemic reform,” he said.
The rubber industry which has been severely hit amid the pandemic, however, was disappointed with no specific measures announced for the sector.
Rohit Kumar Singh, Director General, All India Rubber Industries Association said: “In case of rubber goods industry especially non-tyre segment, the duty differential between inputs and finished goods are irrational. The duty on inputs is either nil or as much as twice the duty of finished goods.”
To bring parity in the entire value chain and to make the campaign of ‘Make in India’ and ‘Atmanirbhar Bharat’ a success story, the government must consider correcting “this anomaly at first place”, he said.
On the decisions on real estate, Amit B. Wadhwani MD of Sai Estate Consultants Chembur Pvt Ltd (SECCPL) said: “It comes at a perfect time when the spirit of home buying is high amongst prospective buyers, especially in the middle class segment.”
While the decision definitely benefits the consumer, from a developer perspective it opens up options to offset homes at a better rate as well as incentivise the sector to invest in tech that can help boost sales, he said.