The reaction of Mr. Pradeep Jain, Chairman, Parsvnath Developers Limited on Demonetization of Currency Notes.
New Delhi, November 28 2016: Hon'ble Prime Minister's move of Demonetisation of Rs 500 & Rs 1000 notes is a very positive move for the real estate sector and the economic growth of the country and this surely deserves support from all segments. The move will be instrumental in eradicating the black money from the system along with bringing in more transparency in the sector.
This move will enable the Government to invest in infrastructure as Banks will deploy lakhs of crores in Government Securities. With a few lakh crore at its disposal, Government can only boost funding to infrastructure schemes such as Smart City Mission, Swacch Bharat Mission, Housing for All etc which will inturn boost real estate too and make foreign investors invest in a fast developing country of ours.
New Airport in town, better connectivity to National/ State Highway, Upgradation in City Transport all of this will lead to increase in demand and prices of properties in the various cities.
Besides this with the demonetization of these currency notes, the most money will flow in banking system from people in the unorganized / small scale sector and with this there will be huge influx of funds in the banks which will strengthen and increase their liquidity thus driving down both interest rates on deposits and loans. The banks should therefore pass on the benefits to the loan borrowers by reducing the mortgage rates.
Commenting on the development Mr. Pradeep Jain, Founder Chairman, Parsvnath Developers Limited, said, "Demonetisation of Rs 500 and 1000 notes is indeed a welcome move by hon'ble prime minister and it will be instrumental in weeding out the black money from the economy. In the short term there could be correction done in the secondary market but in the longer run it will benefit the entire real estate sector."
I also expect the interest rates on home loans to come down to 7-8% from existing 9.5-10%. Historically, real estate has always been an attractive investment destination and even an aspiration of Indians to own their dream house and this move will surely give the sector the desired boost.
I personally feel that with recent developments such as passing of Real Estate Regulation Act, Demonetisation, Goods and Service Tax etc combined with Government focus on infrastructure will only serve as positive factors for growth of Real Estate industry
It is however pertinent to note that though the secondary market transactions in the real estate sector would get impacted there will be no impact on the organised real estate sector as the transactions in the primary market are done through proper banking channels.” added Mr. Jain.
1. Real Estate Industry contributed 7 % to India's GDP.
2. Second Highest employer after Agriculture.
3. Real Estate Industry supports more than 140 allied industries from large ones such as Steel, Cement and Transport to cottage ones such as bamboo and rope making.
4. Real Estate Industry caters to the basic need of Shelter for every citizen.
5. As per Government of India, more than 90 per cent of demand for Real Estate Is in affordable and mid range category.
6. In era of mechanisation and automation, Real Estate is the only Industry which still continues to provide regular employment to millions of daily wage earners.
7. One of the only Industries which contributes large share of taxes at all levels of Government: Local Government ie Muncipal Corporations etc (Building permission charges), State Goverment (VAT and Stamp Duty), Central Government (Service Tax and Income Tax).
8. Investments such as equity shares, Commodities like Gold, Silver, Mutual Fund etc have seen large ups and downs. Real Estate is the only asset class which has given stable and constant one way growth over last several decades.
9. Real Estate has both value in use and value as investment.
10. Real Estate investment is the best investment from a very long term angle as taxation happens only on sale and in case of reinvestment 100 pc tax can be saved.
11. With Indian economy becoming increasingly urbanized, it is expected that more than 50 pc of India's population will live in cities by next decade. This massive change in demographic and economic profile of the country will give big boost to real estate over
Overview of Parsvnath Developers Limited:-
Parsvnath Group with 30 years of experience in real estate industry has Pan India presence across 41 cities and 15 states in India. The Company's diversified business portfolio comprises of Residential, Commercial (Office and Retail), DMRC projects, Hotels, SEZs, IT Parks and Third Party Construction. The company having successfully completed and delivered 57 projects and is currently working on 45 projects with a total area of 53.47 mn. sq ft.