Fiscal policy commitment: increased short term spending funded by borrowing with a plan for medium term fiscal consolidation. Government will present the Union Budget in early July, assess prior stimulus measures, and pursue a concrete short term and medium term growth strategy. Near term policy includes increased public spending funded by incremental borrowing to restore growth and employment, consultations with bankers to improve finance availability, re appraisal and strengthening of infrastructure projects, and a commitment to fiscal consolidation over a two to three year period. The Government will advance financial sector and regulatory reforms and bring amendments to the Prevention of Money Laundering Act into force to bolster the anti money laundering framework.
Liquidity support for real estate sector lowers lending costs and provides special refinance and restructuring relief. RBI implemented liquidity measures for the building and real-estate sector, including repo rate reductions to permit lower lending rates and a Special Refinance Facility routed via the National Housing Bank to enable housing finance companies to obtain funds at reasonable interest; regulators also permitted special treatment for commercial real-estate restructurings up to a specified cutoff. Concurrently, the Government pursued enforcement measures against black money through search and seizure, surveys, return scrutiny, penalties and prosecutions.
Following the global melt-down a liquidity constraint was felt by many sectors of the economy, including building/real estate sector. In order to ensure that this sector is not adversely affected the RBI took a number of measures to improve the liquidity constraints and to bring down the overall cost of credit. With reduction in the REPO rates, the scheduled commercial banks were able to bring down their lending rates to the housing/real estate sector. A Special Refinance facility ofRs.4,000 crore was introduced in December, 2008 to enable the National Housing Bank (NHB) to lend to Housing Finance Companies at reasonable rate of interest. Further more, in view of the difficulties faced by the real estate sector, exceptions/special treatment has been extended to commercial real estate exposures which are restructured upto June 30, 2009. There are several underlying causes of black money generation. The Government takes several punitive and deterrent steps which includes search and seizure operations, survey actions, scrutiny of returns, imposition of penalty and launching of prosecution in appropriate cases.
Liquidity support for real estate sector lowers lending costs and provides special refinance and restructuring relief.
RBI implemented liquidity measures for the building and real-estate sector, including repo rate reductions to permit lower lending rates and a Special Refinance Facility routed via the National Housing Bank to enable housing finance companies to obtain funds at reasonable interest; regulators also permitted special treatment for commercial real-estate restructurings up to a specified cutoff. Concurrently, the Government pursued enforcement measures against black money through search and seizure, surveys, return scrutiny, penalties and prosecutions.
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