'Real
estate' time bomb can explode anytime: Raghuram Rajan
Former Reserve Bank
Governor Raghuram Rajan warned that the real estate, construction and
infrastructure sector is riding on a time bomb that could explode at any time.
According to a report, about $ 47 billion worth of projects are stranded in
India.
There is a lot of
pressure on the real estate sector due to economic slowdown. Former Reserve
Bank Governor Raghuram Rajan warned that the real estate, construction and
infrastructure sector is riding on a time bomb that could explode at any time.
At the same time, he also said that these sectors have got the most loans from
non-banking financial companies (NBFCs). Therefore, their financial condition
is also bad and shadow banking should consider its asset.
The
pressure is more on rural areas
In his article in
India Today magazine, Raghuram Rajan seriously mentioned the economic pressure
on rural areas. The growth rate is declining and in the second quarter it has
reached 4.5 per cent. The problem of unemployment is becoming acute. NBFCs are
no longer in a debt sharing situation. The size of bad loans is increasing, due
to which the process of loan disbursement has slowed down.
Asset
quality review of NBFC - Rajan
Advising the Reserve
Bank, Raghuram Rajan said that he should review the asset quality of NBFCs. On
Thursday, Governor Shaktikanta Das said that the RBI monitors the top-50 shadow
banking. These fifty NBFCs own about 75% of shadow banking. In such a
situation, the Reserve Bank has an idea of where there is a shortage and where
there is pressure.
Special price
Rs.11,499
$
47 billion project stuck
The condition of the
real estate sector in India can be gauged from this that projects worth about
Rs 3.3 lakh crore ($ 47 billion) are stranded. The 4.65 lakh unit house
construction process is stuck in the middle. According to the report,
completion of these projects may take 2-8 years.
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