Welcome the timely and laudable measures by Finance Ministry and RBI: J. C. Sharma, VC & MD, SOBHA
March 28th, 2020
SOBHA welcomes the Rs. 1.7 lakh crore welfare package announced by the Finance Minister recently. The COVID-19 pandemic is unprecedented. The Government has taken laudable steps to deal with this situation. The Finance Minister has already announced an extension of tax deadlines and relaxation in business rules. Today, she has announced a slew of measures to protect the interest of the public, especially the poor and the marginalised and businesses in the current environment. These measures will help the masses who require food, money and cooking gas immediately.
We believe that the initiatives announced under different schemes such as the Garib Kalyan, National Rural Livelihood Mission, Ujjwala, Women Jan Dhan among others are comprehensive and will offer adequate support to the people, who are most affected. This bailout package touching the lowest strata of the pyramid in these times of distress shows Government’s sensitivity and the much – needed empathy. We hail such measures which are in the right direction.
Further, the step to support the construction workers with Rs. 31,000 crore workers’ welfare fund is most thoughtful. This is laudable as it will provide the much-needed relief to 3.5 crore construction workers countrywide, who are mostly dependent on daily wages.
Coinciding with these steps were the relief measures announced by the RBI. Such timely and effective efforts will mitigate the economic impact of COVID-19 and maintain financial stability in the country. These include special lines of liquidity, loan moratorium, deferring of working capital interest to ease the stress in these challenging times.
The reduction of repo rate by 75 BPS and reverse repo rate by 90 basis points to 4% is likely to reduce EMI’s for borrowers and make new home loans cheaper. The RBI has also permitted financial institutions to allow a three-month moratorium on monthly instalments on all term loans. These moves in such times will hugely benefit homebuyers and the real estate sector.
The rate cut is further expected to complement other monetary measures such as the deferring of working capital interest, reduction of CRR for all banks by 100 basis points should address liquidity challenges faced by NBFCs and banks by easing investment inflows into the country. These accommodative measures will ensure that adequate liquidity is available to all constituents and COVID-19 related liquidity constraints are eased.
Together, these initiatives will help overcome the current challenges and will aid in rebuilding the economy.