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Steps to boost housing to decide growth outlook: CLSA
Mumbai, Aug 24 (IANS) Among the big ticket announcements made by Finance Minister Nirmala Sitharaman, the measures to boost housing will be key to the revival of the ailing economy, brokerage firm CLSA on Saturday.
"Economic outlook will depend on how big the measures to boost housing turn out to be," CLSA said.
Sitharaman on Friday indicated on a separate set of announcements to be made for the housing sector next week.
The government also took cognizance of the issues of stuck projects, particularly in the National Capital Region and Mumbai region, and will present measures to resolve the situation.
CLSA also noted that the measures announced by the government and expectations for more over the next couple of weeks will likely improve investor sentiment and would drive at least a short-term bounce.
"The government has given a clear signal that it acknowledges an economic slowdown and is willing to act promptly to address the issues," CLSA said in a note.
Key decisions by the Finance Minister seen as a blue print for the economic revival included reversal of the recent increase on equity capital gains taxes for domestic and FPIs, accelerating PSU bank recapitalisation, and demand support measures for the auto sector.
For Housing Finance Companies (HFCs) the National Housing Bank will provide an additional line of funding of Rs 200 billion over the Rs 100 billion to HFCs. This will provide additional liquidity to HFCs at reasonable rates, the government had said.
Besides measures to contain ‘tax harassment’ concerns and to boost liquidity for NBFCs were also announced.