The government must increase affordability and incentivise people to buy homes, says Yashpal Gupta, MD & CEO, Repco Home Finance. Gupta during an interview with Swati Khandelwal said the government should come out with some credit enhancement products and the regulators must create a funding line for good NBFCs and HFCs. Edited excerpts:
What are your expectations from the upcoming Union Budget?
We have three types of expectations from the Union Budget and they are (i) NBFC and HFC sectors are struggling for a long time and amid such a situation, the banks, who fund a lot to the sector, are using the same lens to look at every company of the sector. Under such a situation, I would like to request to the Reserve Bank of India and the government to ask the bank to not use same lenses to judge every company and start funding the NBFCs and HFCs that are doing well in the domain. (ii) it should increase NHB (National Housing Bank) funding so that it increases refinances. (iii) the real estate sector is going through a difficult phase and at such a situation the government through this budget should help it by (a) increasing affordability and incentivising people for buying the houses, and this can be attained by offering tax exemption and it can be done by increasing the principle of housing and (b) by introducing new measures to encourage construction and its speed as several products have been stuck and are lying idle due to increased cost of construction.
The GST council in the recent past has given several concessions. Did these steps had any impact on your business?
Yes, it has benefitted us, but it is not visible on the ground, yet. Actually, there are two types of people who purchase property and they are (i) for investment purposes and (ii) to reside. So, the purchaser, the customer, think if I am paying for the property then why I should not wait till the project is completed as I will not have to pay the GST. Secondly, the buyers have a feeling that the rates will go down in the near future, so why I must not defer the purchase for a time being.
Market is not reacting positively towards the HFCs, as investors are pulling back their money. Can you suggest something to tackle the problem?
See, it is a long-distance game and can’t be resolved in a go. But, I feel the regulators, the NHB as well as the RBI, should look at who is going through a temporary liquidity problem and who is going through a long-term solvency problem. Then their asset quality should be indexed. So, the government should come out with some credit enhancement products and the regulators must create a funding line for good companies as it is a must thing at present.
— Zee Media Newsroom
