I am delighted to present the annual report for your Company's performance for FY2019which marks the completion of 30 years of rich history. With three decades of consistentgrowth we have both youth and experience on our side making us one of the most enduringhousing finance institutions of India.
Reflecting specifically on FY2019 we have been witnessing a synchronised global growthdeceleration though easy policy stances by the fiscal and monetary authorities in severaleconomies tries to cushion the pace of the slowdown. The global trade outlook remainsuncertain as the largest economies of the world struggle to strike a deal.
Despite a challenging year the Indian economy continued to remain the world's fastestgrowing large economy. During the fiscal the overall economic scenario remained understress with GDP growth slowing down gradually each quarter to 5.8% for Q4 FY 2019. Withthis economic backdrop a spate of policy reforms favouring the affordable segment havebeen introduced in sync with the government's vision to provide "Housing for All by2022." During FY2019 more than 45% of new supply was added in the affordablesegment; while over 70% new supply was added in sub Rs. 80 lakh price bracket indicatingthat developers are aligning their offerings according to the current market dynamics. InFY2019 15% of LICHFL's total disbursements was made towards the affordable housingsegment under PMAY up from 7% YoY.
With a strong thrust on infrastructure sectors and rental housing market in the mostrecent Union Budget the demand for products services and homes should rejuvenate andkeep the country's economic momentum fuelled. Going forward HFCs should consequentlycontinue to witness robust growth. Other key drivers behind this expectation are thegeneral recovery in the real estate market the formalisation of the realty marketplacethrough RERA and the stabilisation of GST. As one of the largest Housing Financecompanies in India LIC Housing Finance is well placed to capitalise on such favourableconditions.
IMPACT OF THE UNION BUDGETS OF 2019
Infrastructure has stayed at the top of the Government's agenda and affordable homebuyers and real estate developers will also stand to benefit from the Union Budget. Thegovernment announced its intentions to introduce a new model tenancy law to boost thefragmented rental housing market and has proposed further tax incentives in line with itscontinued effort to achieve the Housing for All' target by 2022. Despite the growingdemand for rental houses from working millennials and entry by few new-age start-ups inbuilding student housing or co-living spaces there has been lack of clarity on rules andregulations related to rental housing. The move by the government is likely to helpstreamline and boost India's rental market which is estimated to be around $20 billion asper IMF. The Budget also proposed building large public infrastructure on several landparcels held by central government and public sector enterprises. This should also helpthe supply position of realty space keeping a check on realty prices.
Over our journey of the last 30 years we have seen through all kinds of competitionand each time we have come out as a top performing player in our industry. With a strongbusiness foundation an extensive distribution network and proven industry expertise LICHousing Finance is a warmly respected and trusted financial services company. Ourproactive investments in technology diversified resource profile and wide productportfolio have contributed to LIC Housing Finance earning this reputation.
Going forward our responsiveness resourcefulness and responsibility will help usensure a sustainable growth trajectory. Even though the market is facing the aftereflectsof the liquidity crisis we are undeterred to start the next decade with great zeal andanticipation while upholding our place as a leading Housing Finance Company in India overthe course of time. Moreover our expanding distribution network and superiorfundamentals and top ratings will keep us in pole position for years to come.
With a stable Government being elected I believe that the marquee projects of Housingfor All and Infrastructure Development initiatives amongst others should help improve theoverall economic growth across sectors. The Housing Finance sector in particular isriding on a new wave of optimism following the triple benefits it received from thegovernment in the first three months of 2019. These sops have not only increasedhomebuyer's sentiments but should also increase the confidence o f builders and long-terminvestors.
Your Company has shown itself to be immensely agile and innovative over the years andthese attributes will continue to serve it well in the years ahead. For a business that ispinned on strong values and principles over the last three decades the ups and downs ofshort-term economic cycles become insignificant blips in the broader context of history.As we enter the fourth decade of our journey we re-afirm our commitment to exceed ourcustomers' expectations while also creating value for all our stakeholders.
I would like to express my gratitude to our Board of Directors for their expertise andguidance. I am also grateful to all our stakeholders who have reposed their trust in usand given us constant support.
Wish Best Wishes
M. R. Kumar