New Delhi: Real estate developers must lower home prices to clear unsold inventories so that buyers can get places to live at affordable prices, new CII President Uday Kotak said on Thursday.
During his first press conference as the new head of Confederation of Indian Industry (CII), Kotak said he is in agreement with Commerce and Industry Minister Piyush Goyal on the issue.
The video conference was organised by the National Real Estate Development Council (NAREDCO) where Goyal said: "You have to complete your projects before you sell because buyers will not buy under-construction projects. In my life, I will not buy an under-construction flat from anybody."
Goyal said many real estate builders have taken customers for a ride.
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"You will have to complete your projects, bring partners and get investors. But unless you complete your construction and sell at realistic prices, there is no other choice."
Commenting on the Centre for Monitoring Indian Economy (CMIE) unemployment number of 23.5 per cent in May, Kotak said there are many sectors of the economy where job losses have been witnessed. But there are other sectors where new jobs have been created.
"We will have to focus on addressing the unemployment problem and create new job opportunities," said Kotak.
He added that India has to dramatically increase spending on healthcare and education like European countries.
"Germany is handling COVID-19 very well. Germany has the best healthcare system. We spend around 1.3 per cent on healthcare while European countries' spending is in double digits," said Kotak.
Kotak against waiver of interest during moratorium period
Uday Kotak also opined against any waiver of interest during the moratorium period saying there cannot be an unequal game wherein banks pay the depositors but do not earn interest on loans.
Kotak was responding to a question on the ongoing case in the Supreme Court on waiver of interest during the moratorium period.
"Banks are intermediaries between depositors and borrowers. So, we (cannot) have a situation where borrowers get moratorium, banks have an obligation to serve depositors both on principal plus interest. Therefore, we cannot have a one-sided contract where we allow moratoriums on interest to the borrowing side," said Kotak.
People asking for moratorium on interest also need to keep in mind the interest of depositors, he said, adding "it cannot be an unequal game do not think about saying, moratorium on what I borrow, but I must get full interest on deposits.
"If the banks have to serve borrowers, they have a bigger duty to serve depositors. Depositor is the core of the financial system. The trust and confidence of the depositor must be nurtured and protected because that is the foundation of a stable financial system," Kotak said.
The Indian financial system has always protected the depositor's interest which is the core basis and intent of the Banking Regulation Act, he stressed.
Need growth with focus on lives, livelihood
Uday Kotak also said as the coronavirus pandemic has changed the status quo of the world, the corporate sector now needs to focus on managing growth, lives and livelihoods while considering the challenges associated with life after the pandemic.
Presenting a 10-point roadmap to revive growth in the post-Covid world, Kotak also said that growth is a necessity now and it should lead to creations of jobs.
The Confederation of Indian Industry (CII) has laid out a 10-point road map to revive growth and navigate the challenges of loss of lives and livelihoods posed by the global pandemic COVID-19 that has forced countries across the world to reset their growth paths. The industry body's theme for 2020-21 is 'Building India for a New World: Lives, Livelihood, Growth'.
One of the major features of CII's roadmap is the protection of lives and livelihoods.
(ANI and PTI Report)
