DELHI: Realtors' body CREDAI today criticised the RBI's decision not to cut rates and keep key policy rates unchanged, saying the status quo in credit policy would affect the country's GDP growth and employment generation.
The association demanded that the interest rates for developers as well as home buyers should be brought down to boost realty sector, which is facing a slowdown in demand.
In the mid-quarter policy review, Reserve Bank of India kept the key interest rates unchanged citing elevated food inflation, rupee depreciation and uncertainty over foreign fund inflows.
Criticising the Reserve Bank of India's status quo in credit policy, CREDAI Chairman Lalit Kumar Jain said the no-change approach will lead to an irreversible economic slowdown. "This will harm the GDP growth and employment generation," he observed.
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Stating that the realty sector is capital and labour intensive, Jain demanded that RBI should make a policy to encourage construction of mass housing instead of stifling its growth with credit squeeze and unaffordable rates of interest for both the developer and the buyer.
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The developers should be encouraged to flood the market with housing stock which will lead to a price check, he added.
Confederation of Real Estate Developers Association of India (CREDAI) has over 10,000 developer members pan-India.
"The negative weightage given by RBI to the sector is forcing the developers across the country to go for high-cost non-bank funding thatadds up to the high cost of inputs," Jain said.