India's buildings sector to expand by 6.6% next year driven by fiscal support, govt policies: Fitch
Publish on : 2020-03-03 13:00:32
NEW DELHI: Fitch Solutions on Monday said it expects the country's residential and non-residential buildings sector to expand by 6.6 per cent, in real terms, next year, driven by fiscal support and a continued focus on the provision of affordable housing in urban areas.
"Short-term expansion of India's building sector will be driven by a mixture of fiscal support and government policies supporting the housing market, as well as heightened activity within the logistics, retail and industrial buildings sectors," it said in a statement.
Long-term growth, on the other hand, will mainly be driven by country's massive population, which requires continued investments into residential building construction sector, the statement said.
Instances of stalled housing projects have been on the rise over the course of 2019, due to a credit crunch sparked by a series of defaults by non-bank financial companies, resulting in a decreased access to funding for both developers and homebuyers.
In response, the government "approved a Rs 10,000 crore package in November 2019 aimed to aid stalled housing projects, with an additional Rs 15,00 0 crore to be contributed by state-run financial institutions."
With funds more readily available, it expects a portion of stalled housing projects to resume construction, and this will feed into its forecasts for India's buildings sector growth in the short term.
Opportunities in the construction of affordable housing units will remain strong over the coming years, driven by Prime Minister Narendra Modi's Pradhan Mantri Awas Yojana (Urban) initiative.
Introduced back in 2015, Pradhan Mantri Awas Yojana aims to provide affordable housing to all urban poor by 2022, targeting more than 4,000 towns handpicked by the government.