By Dr. Niranjan Hiranandani is Vice Chairperson NAREDCO and MD Hiranandani Group
Taming steep inflation hike is a preordained measure by RBI, given the global economic ballgame. Soaring commodity prices especially with food and energy prices, plummeting currencies, supply side shocks are the foremost reasons for rising input cost. A two-thong approach by the RBI governor and the Government of India by means of monetary and fiscal intervention is an absolutely necessitated step to administer economic growth as well as arrest inflationary pressure. A corroborated approach is hailed by India Inc to sustain economic resiliency and boost sentiments.
It is evident that home loan interest rate hike will impair the home buying rally as pay out in terms of EMI is scheduled to rise. But according to me this crater in demand sentiment is a makeshift move, as home loans are based on floating rate for a long tenure. The EMI constraint will be eased as rates are expected to normalize once the global situation is stabilized. The hike in the limit of individual loans by co-operative banks by 100 per cent is a welcome initiative for home buyers who opt for home loans from co-op banks.
RBI’s GDP growth forecast for FY23 is pegged at 7.2 per cent with risks evenly balanced, while the repo rate is still below pre-Covid-19 levels. This creates hope that a normal monsoon coupled with measures by GoI should help ease inflation stress, and the RBI’s ‘accommodative’ stance, hopefully, may return sooner than later.
Also Read: RBI withdraws accommodative policy ends, easy liquidity policy
