Industry Hails Stimulus Package As First Step Towards Self-Reliant India

As Finance Minister Nirmala Sitharaman announced details of the much-awaited fiscal stimulus package on Wednesday, the industry players whole-heartedly welcomed the annoucement. 

Industry observers said that the announcements were much in line with the government’s aim to spur economic growth and build a ‘self-reliant’ India with the government taking strong measures to improve liquidity in the system.

Many experts also believed that the stimulus package was the first step towards making India a self-reliant economy.

According to Anuj Puri, Chairman, Anarock Property Consultants, the announcement to extend the timeline for project completions and registration by six months was a major relief to real estate developers.

"This is a big move that will destress developers significantly, since construction activity had been halted all across the country. Homebuyers’ wait for their homes will get extended by this move, but this was in any case inevitable," he said.

On the announcement of Rs 30,000 crore special liquidity scheme for NBFCs, HFCs and MFIs, he said this would ease liquidity woes of stressed players and will benefit the real estate sector significantly, given that NBFCs and HFCs are major lenders to it and together contribute almost 56 per cent of total lending to real estate in India currently.

In another major move to revive the MSMEs, the FM tweaked the definition of such companies to provide benefits to many more units. 

"The collateral-free automatic loan for MSMEs worth Rs 3 lakh crores will give a lifeline to nearly 45 lakh units for four years. With this, the government aims to curtail job losses, and this could indirectly benefit affordable housing. Fear of job losses may have caused many potential affordable home buyers to defer their purchase decisions," Puri said.

Archit Gupta, Founder, and CEO, ClearTax, said that with the reduction in EPF rates, some taxpayers may have to relook at deductions they want to claim especially with the new regime kicking in. 

"Also, surreptitiously the contributions to EPF will fall, interest rates on EPF is already falling; besides lakhs of people have withdrawn EPF balances. All of these measures reduce the interest burden for the government. And while there may be more money at hand, taxpayers need to be acutely aware of their investing and figure out how to work towards building a retirement corpus," he said. 


Gupta added that the government has taken strong measures to improve liquidity in the system. 

"The release of emergency credit lines to MSMEs, capping of interest, and credit guarantee will help them get back on their feet and respond to this crisis. Reduction in tax deduction and collection rates for non-salaried payments and reduction in EPF contribution rates will further increase cash in hand for taxpayers, leading to a consequent boost in demand, setting the economy rolling," he explained.

Hakim Lakdawala, Group Promoter, Goodwill Developers, said the economic package of Rs 20 lakh crore aimed at providing immediate relief against the impact of coronavirus on the Indian economic is a bold move by the central government to make India a self-reliant economic powerhouse in time to come. 

"This comes as a major relief for businesses to maintain a stable workforce and gives boost the sectors that have been adversely affected by the pandemic. With the easing of restrictions in the lockdown 4.0, we are hopeful that country will slowly and steadily move to the path of recovery," he said.


Farshid Cooper, MD, Spenta Corporation hoped that the relief announced today and other similar announcements in the next couple of days along with probable easing of restrictions in lockdown will instill confidence in the citizens and kickstart consumption.