“The latest round of stimulus package by the Government is a bouquet of measures that incentivizes job creation in the informal sector, expands the supply of loanable funds through enlargement of credit guarantee scheme to support stressed sectors and a strong push to real estate, with tax incentives for home buyers that could potentially unleash a price discovery in the real estate market. The Government also proposes to enlarge the rural employment scheme that could continue to support rural recovery. The support for project exports could potentially widen the risk-taking capabilities of EXIM Bank. Overall, these measures will ensure that we continue to take steps towards a sustained economic recovery.”
Mr. Kamal Khetan, Chairman and Managing Director, Sunteck Realty Ltd
“The Finance Minister positively responded to the real estate industry’s long standing demand for increasing the differential between circle rates and market value for tax exemption purposes as property value in many parts of India have already gone down below the ready reckoner rates. The move to hike the differential to 20% will help developers to offload the inventory and homebuyers to proactively buy properties without any tax liability. Also, providing an additional outlay of Rs 18,000 crore for PM Awaas Yojana is a direct intervention and would stimulate homebuyer’s sentiment under the affordable housing sector besides having a multiplier effect on direct employment and growth of real estate allied industries."
Ms. Aditi Nayar, Principal Economist, ICRA Limited
The multi-sectoral announcements are expected to boost sentiment and help to bolster the strength of the economic recovery in H2 FY2021. In particular, the measures to boost capital spending and infrastructure, job creation, as well as support the rural farm and non-farm economy, will trigger a virtuous cycle in the economy. While the benefit of some of the measures announced may manifest into a growth boost only over the medium term, they are nonetheless very welcome.
Notwithstanding the robust reform momentum and stimulus announcements so far, government spending contracted on a YoY basis in Q2 FY2021. We hope to see this turnaround in the ongoing quarter, to help solidify the economic revival.
At present, our forecast for Indian real GDP in FY2021, is of a contraction of 11.0%. We will revisit this projection in early December 2020, after the data for Q2 FY2021 is released by the NSO. By then, there will be greater clarity on the likelihood of the endurance of the festive season uptick, as well as the pace of new covid-19 infections domestically and in major trading partners during the colder months.
Shivpriya Nanda, Partner at J Sagar Associates
“Announcement to infuse 6000 crores in the National Infrastructure and Investment Fund could result in increased investment by the Fund in the aviation sector which needs approximately 20 billion USD in the next five years and has suffered terribly due to the pandemic. Growth of the aviation sector post pandemic normalisation will be dependent on new and better infrastructure and deeper connectivity.”
Prof. K.R. Shyam Sundar, Professor, HRM Area, XLRI, Xavier School of Management, Jamshedpur
The Finance Minister’s relief package issued today will surely make a positive impact thought limited. This is primarily because the relief is routed through the EPF route rather than a direct wage subsidy and the EPFO’s coverage notwithstanding the claimed progress is still limited in terms of the existing scheme of coverage of establishments and the income threshold of Rs15,000.
Ankit Sharma, Director Airific Systems
"We welcome the initiatives announced by the Finance Minister to boost the Atmanirbhar Bharat Rozgar Yojana. The scheme made by the finance minister will encourage people who have lost the job during the time of the global pandemic and the Centre will provide subsidy for two years in respect of newly eligible employees engaged on or after October 1, 2020. This has opened a lot of new avenues for many and I believe this move will make it easier. The opportunities created by the Finance Minister will enable employees to penetrate fast and make greater contributions to economic growth. The country's economy is going to attain its fastest growth trajectory from the next financial year 2021-22 onwards."
Published as received
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