India reported 382,315 new Covid-19 cases on Wednesday. According to the MoHFW, the total caseload now stands at 20,665,148. India has added 2,649,808 infections to its count in the last seven days alone. There are currently 3.49 million active cases in the country. It was appearing that the second wave is threatening economic recovery. However, the RBI on Wednesday showed confidence that it need not deviate from its projections. The real estate sector welcomed the stance taken by the Apex bank as the RBI Governor Shaktikanta Das said, "Restoring livelihoods has become an imperative".
Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com, said, "The Reserve Bank of India has reiterated its commitment to mitigating the damage due to coronavirus by providing support to many quarters, including a Rs 50,000 crore Term Liquidity Facility, to ease access to emergency health services. The real estate sector was anticipating steps such as assistance in loan restructuring and a moratorium to help it get through these difficult times. In its next announcement, the RBI should take into consideration the needs of the real estate sector."
The RBI also announced steps to shield small and medium enterprises, as well as individual borrowers, from the negative effects of the country's extreme second wave of COVID-19. Considering that the resurgence of the pandemic had made these categories of borrowers most vulnerable, Sarthak Gaur, Director, Gaurs Group, said, "The country's current condition must be balanced with calibrated, sequenced, and well-timed policy steps. The Reserve Bank of India (RBI) has taken measures to restore investor faith. The relief provided to vulnerable category borrowers, such as individuals, small businesses, and MSMEs, is much-needed, as localized restrictions have disrupted them. The improvement in this segment would lead to an improvement in the mall segment, which has been in a difficult situation in some cases due to losses faced by the retailers. Overall, the first round of announcements was fair and balanced, addressing the most pressing issues."
Realtors feel that the steps taken by the RBI will amplify the positive sentiment seen in Q1 2021. Amit Modi, Director ABA CORP & President (Elect), CREDAI Western UP, said, "After the first wave subsided in 2020, the economy was in a better place, but the situation has dramatically changed after the second wave hit the country. The RBI eased lending and restructuring norms for all stakeholders, particularly those smaller businesses and MSMEs that have been impacted by the second wave. We are confident that it will amplify the positive sentiment seen in Q1 2021 across all sectors, including the real estate market, which outperformed expectations with a significant increase in sales."
In his address, the RBI Governor expressed the Apex bank's resolve to do everything at its command to 'save human lives and restore livelihoods through all means possible'. However, the real estate sector was expecting some relief from the Apex bank, which did not come this time. Uddhav Poddar, MD, Bhumika Group, said, "We welcome that MSMEs and small borrowers have got a one-time loan structuring that would be beneficial in the current scenario, since they are the engines of the economy, but this should be extended to all businesses, especially the real estate sector. However, immediate relief by way of EMI deferment and a loan moratorium for all businesses is urgently required as there is a lockdown in nearly all parts of India, and there is hardly any economic activity taking place."
The RBI has maintained that the second wave was debilitating, but it was "not insurmountable". Mr Das also asserted "We do not expect any broad deviations in our projections". Taking positive from the stance taken by the RBI, Akshay Taneja, MD, TDI Infratech, said, "The absence of a moratorium announcement will be viewed positively by the market, implying that the situation is not dire enough to warrant another moratorium. The RBI's actions are unlikely to give the market a big boost, but they are likely to provide downside support and boost morale. However, the pandemic has had a wide impact on the industry. A rollout of wider relief initiatives aimed at mid-corporate and large borrowers, and industries heavily affected by the pandemic, such as real estate, hospitality, would have been beneficial."