The government is working with the Reserve Bank of India (RBI) to look at possible amendments in the laws to help the real estate sector.
Finance Minister Nirmala Sitharaman, while addressing a capital market event on Tuesday, said that the government had not yet fully addressed the issues faced by the real estate sector, but would soon address the ‘sluggishness’ that is being faced by the sector.
“Government of India is very keen and is working very clearly together with RBI to see how best we can, where necessary, tweak the existing blocks to help the people who are affected in this sector, which I have not really completely addressed till now,” she said, addressing market participants at the National Stock Exchange (NSE).
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The real estate sector requires a lot more attention because the sluggishness which prevails there has got to be addressed, she added while highlighting the fact that the government had been announcing various interventions since August to revive the economy in terms of consumption and demand. Interestingly, the Finance Minister further said that many funds had approached the government and were keen to work in the sector, provided proper support mechanisms were put in place.
“There are alternative funds, which are now approaching us saying we would like to do something with you all. So long as there is some support mechanism available for reviving the real estate sector,” she said.
Ms. Sitharaman further said that the government was giving a lot of importance to the real estate sector because it had a spill over effect on many other sectors, including core industries, and also on the vast number of middle class home buyers.
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Deepening debt market
On a different note, she said that her Ministry was working on deepening the debt market and that stock exchanges can play an active role in attracting more retail investors in the segment as currently corporates are dependent only on banks for debt and banks alone cannot service the entire requirement.
Ajay Tyagi, chairman, Securities and Exchange Board of India (SEBI), who was also present on the occasion, said that the development of the bond market required much more attention and a unified approach by all regulators.
“The present NPA position of banks adds urgency to such a development with a view to providing alternative route for raising debt by entrepreneurs. A deep and well-functioning bond market would further add heft to the capital market in India,” Mr. Tyagi said.
The SEBI chairman, however, added a word of caution for stock exchanges and said that while exchanges are for-profit commercial entities, they needed to devote sufficient resources for regulatory functions and should abstain from misusing their oligopolistic position by having exorbitant and unreasonable fee structure.