Apropos your editorial, “Reviving housing” (November 8), the finance minister’s announcement of the Rs 25,000 crore package for the revival of the real estate industry is one of the best measures taken so far to arrest the downward slippage of the economy. The package, if implemented judiciously, has the potential to give a big boost to our doddering growth. The construction industry — with its multiple linkages across sectors like steel, cement, tiles, cables and electric goods including fans, pipes and sanitary ware, doors, windows and hardware, sheet glass etc — can have a far reaching effect on the economy. It will also mean a boost to the transport sector and, more than anything else, provide jobs to many. Great proposal indeed.
The manner in which it is being structured it has excellent chances of success. The Sebi has an unblemished record of being a very sharp watchdog and SBICAP should be a good project manager. With stated emphasis on smaller housing units, it should help a very large number of middle class people who — after investing their hard earned savings as well as loans from various sources — are facing acute stress due to stalled projects. Providing succour to them would be a great confidence building measure. Overall, one doesn’t see much of a chance of failure of the project or any downside.
Permit me to mention that your apprehensions — “it all looks good on paper but things are unlikely to be that straightforward” — are perhaps not correct. Admittedly it would need very meticulous and constant monitoring but even if it “funds only 16 per cent of the stalled projects” it is a giant step forward. SBICAP Ventures having already identified 12 projects is an excellent start and portends well for the scheme.
Indeed, there is a close connection — as you conclude — between the recovery of the real estate sector and the broader recovery of the economy and that is exactly why this move of the government might prove to be a game changer.
Krishan Kalra, Gurugram
Letters can be mailed, faxed or e-mailed to: