Dr Niranjan Hiranandani – Vice Chairman – NAREDCO on th monetary policy

This Monetary Policy Review sees a challenging situation for the RBI’s Monetary Policy Committee (MPC); as they balance the need to boost economic growth while simultaneously tame the alarming inflation. Commenting on the unchanged repo rate at 4 per cent and hiked reverse repo rate by 40 basis points to 3.75 percent an indicative stance to focus on withdrawal of an accommodative stance, Dr. Niranjan Hiranandani, Vice Chairperson NAREDCO and MD Hiranandani Group, said, “The burgeoning crude oil complexities in the wake of Ukraine war has compounded global economic challenges, impeding supply chain funnel across geographies. The notable spike in price points within the domestic market shows inflationary trends, denting consumer sentiments.”

“Understanding the balanced policy review, the trimmed GDP outlook casted at 7.2% for FY 22-23 is real economic discomfort, as it will impede steady growth of many industries and arrest the pace of economic growth rate. Soaring inflationary pressure as a result of an alarming spike in raw materials, input costs and crude oil prices will hurt profit margins in the affordable housing segment. As a result, an upward revision in prices is inevitable to ensure project viability,” he added.

The FY 22 Q1 witnessed an optimistic demand in home buying rate basis the realization to secure a steady real estate asset that enables shelter, safety and comfort in crisis. “The current low home loan interest rate and individual housing loans’ risk weight guidelines which have been extended till 31 March 2023, will continue to be the ‘demand catalyst’ in the short term, ensuring sales velocity remains high despite the brief upwards revision in pricing of housing. An extension to PMAY – CLSS scheme till FY 2025 will augur well for the affordable housing segment. Commercial real estate demand is witnessing a gradual pick up in absorption on the back of positive sectoral output performance and increase in salaries ,” he concluded.