Pre RBI policy Quote- Dr Niranjan Hiranandani

New Delhi, December 17, 2024: The anticipated repo rate cut by 0.50 bps by the RBI on December 6th monetary policy will be a critical decision to further stimulate India’s economic growth.

The RBI’s assertion that high interest rates curb food inflation is a flawed understanding of the underlying factors driving food price increases. While monetary policy may influence demand-side pressures, it has a limited impact on supply-side constraints. In reality, supply-side constraints influence food inflation more than interest rate fluctuations. As a result, RBI can afford to lower interest rates to foster sustainable GDP growth and to effectively manage the food inflationary pressure through supply-side solutions.

A reduction in interest rates will make home loans more affordable, thereby boosting demand in the real estate sector, particularly in the affordable housing segment.  This positive move, coupled with the prevailing macroeconomic conditions of tamed inflation, stable crude prices, and a strong domestic economy, is poised to further invigorate the real estate sector.

The Indian real estate sector is already experiencing robust momentum, driven by factors such as increased exposure of banks and FIIs to retail home loans, record-high property registrations, and historically low NPAs. A rate cut will further amplify this positive trend, making homeownership more accessible for a larger segment of the population.

This timely policy intervention will not only benefit the real estate sector but also contribute to overall economic growth, job creation, and social upliftment. We are optimistic about the future of the Indian real estate market and believe that this rate cut will further solidify its position as a key driver of the nation’s economic progress.

Corporate Comm India (CCI Newswire)