Yet more finance is to be poured into India’s ailing economy as the government looks to encourage investment in domestic markets.
Commerce minister Kamal Nath revealed politicians were prepared to carry on injecting funds to provide stimulus to troubled sectors, with real estate among those facing difficulty.
He also revealed India’s foreign direct investment total could touch about $30 billion for the fiscal year, $5 billion short of the intended target.
Many real estate companies have been targeting investment from non-resident Indians and other outside sources in a bid to maintain growth and stability.
The minister also shed light on how the Reserve Bank of India (RBI) is continuing to tackle a shortage of finance, also currently affecting the real estate sector.
He said:
“There is room for greater liquidity. RBI will certainly consider this and devise commensurate policies for the injection of liquidity into the economy.”
The government has already released two stimulus packages, while the RBI has released about Rs 3,20,000 crore into the system to help free up finance and encourage investment.
Earlier this month the Associated Chambers of Commerce and Industry of India (Assocham) said direct government actions would help real estate, provided it was targeted at freeing up finance.
But some business leaders have also argued against further foreign investment, saying recovery must come from within.
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