Economic Slowdown Bottomed Out, Uptick From Here On: Chief Economic Adviser K V Subramanian

India has jumped past 4.5 lakh coronavirus cases and 14,476 people have succumbed to the viral infection so far. In this backdrop, speaking to IANS in an exclusive interview, AIIMS Director Randeep Guleria said India is also vulnerable to second wave of coronavirus and people should continue to follow social distancing, wearing mask and other precautions, after cases begin to decline.

He added that in order to contain the outbreak of Covid-19, a limited lockdown in hotspots, where volume of cases is very high, may be considered along with a micro-plan to prevent leakage of cases from these areas to other non-containment areas. Excerpts of the interview are below:

Q: Reports say China and South Korea are witnessing a second wave of coronavirus infection, what is this second wave, is India also vulnerable to this?

A: When cases come down significantly, people tend to drop their guard against the viral infection, and this leads to the second wave (which means a sudden increase in the number of cases). After cases begin to decline, people should continue to follow the precautions -- continue to maintain social distancing and wear masks regularly. See what happened in Singapore, it was struck by a second wave of coronavirus. Look, what happened in the 1918 pandemic, people dropped their guard and the second wave of viral infection struck back. If people do not follow social distancing then the spike in cases is apparent. We need to take these precautions at least for one year. India is also vulnerable to this second wave.

Q: If Covid-19 cases continue to rise rapidly, do you think we need another lockdown in areas where volume of cases are very high?

A: A large volume of cases is concentrated in specific areas like hotspots, and in order to maintain things in order, we may need a limited lockdown in these areas. This should be followed by a micro-plan which entails extensive testing of people and also extensive contact tracing of people who have got in touch with positive people. Need to ensure there is no leakage of cases from these areas. People from these areas should not mix with others in non-containment areas. This will aid in containing the outbreak of the virus. People who have developed symptoms should get themselves tested, especially in the containment areas.

Q: With more than 4.5 lakh cases and close to 14,500 deaths, do you think India has reached its peak and a decline in cases is prominent?

A: The cases will continue to increase for some time. The doubling time of cases has also increased. But, the cases will also begin to flatten. Though, it is difficult to give an exact time period in this viral infection, it seems, the growth in cases will flatten in the end of July or beginning of August. A decline will come to this viral infection, but it does not mean that people should drop their guard. As a measure, we need to decrease community participation and citizens should continue to follow social distancing. People should get themselves tested. All these efforts will help in preventing people from contracting this virus. These precautions will also prevent us from the second wave, and we must continue to take precautions. The virus has not gone away, it is still lurking.

Q: India has crossed the 4.5 lakh coronavirus cases so far, although our recovery rate is good, but still 10,000 to 15,000 cases are reported daily. Why do cases continue to spiral, what is the reason?

A: We have to remember a few things -- the bulk of cases are in 10 cities, nearly 70 per cent, and if we take into account cases per million population, the number is not very high, as compared with countries including countries in Europe. Many European countries put together still do not add up to the Indian population. Do not compare India to countries like Italy, Spain etc. We need to focus on hotspots, which contribute to between 70 -80 per cent of cases, and we have to identify cases in these areas at an early stage. The population density is very high in these cities. People in lower socio-economic status are highly vulnerable to the viral infection, as many live together in small spaces and there is a lot of mixing of people happening there. Look at the market places, people are not following social distancing and not wearing masks. In fact, many are in close vicinity of each other.

New Delhi, May 25: Realtors' apex body CREDAI has written a letter to Prime Minister Narendra Modi, seeking immediate relief measures to tide over the crisis caused by the COVID-19 pandemic.

The association, which has around 15,000 developer members, has sought one-time debt restructuring, lower interest rate on home loans and tax sops to boost liquidity and demand in the sector.

In an open letter to the prime minister, the Confederation of Real Estate Developers' Associations of India (CREDAI) said, "In this distressful situation arising out of the COVID-19 calamity, we in the real estate sector seek immediate relief for our survival."

Stating that the sector contributes substantially to the country's GDP and has backward and forward linkages with almost 250 industries, CREDAI said, "Our survival, therefore, is not just desirable, it is rather crucial for the economy."

Liquidity crunch, stagnant demand and cartelization of raw materials are major impediments for the industry to kickstart, it added.

CREDAI made seven recommendations to revive the sector and sought immediate intervention from the prime minister.

Pointing out that the situation is "much worse" than global financial crisis in 2008, CREDAI said "a one-time restructuring scheme as was permitted by RBI in 2008 may be quickly instituted by all lending institutions."

Since real estate was already reeling under a cyclical downturn before COVID-19, debt restructuring needs to be allowed for all accounts which were standard as on December 31, 2019, it added.

CREDAI demanded that all banks, non-banking financial companies (NBFCs) and housing finance companies (HFCs) should be directed to provide additional credit equal to 20 per cent of the existing real estate project related advances with no additional security and without the classification of project as NPA.

The penal interest charged by banks and financial institutions should be suspended for a period of one year or until such time as it takes for the pandemic to abate.

To revive housing demand, CREDAI suggested that "government should reduce the maximum rate of interest on new home loans to 5 per cent by subsidizing the interest component of EMIs for next five years."

The limit of principal deduction on housing loan under Section 80C should be increased to 2.5 lakh.

Interest deduction under Section 24 on housing loan for homebuyers may be increased to Rs 10 lakh, it said.

There should be no capital gains for residential properties held for a period longer than one year.

CREDAI also demanded that the subvention scheme be allowed again by National Housing Bank (NHB) and the Reserve Bank.

Under the scheme, builders used to pay EMIs on behalf of homebuyers during construction of projects.

"The economic uncertainty and job insecurity at the moment would not allow purchase of residential property at this time. A scheme whereby a homebuyer would need to pay only margin money with no EMI for 24 months will address this insecurity," the letter said.

The association pointed out that prices of cement and steel have been increased during the lockdown period, and asked for crackdown on cartelisation by manufacturers.

On the GST front, CREDAI said that the current regime of GST provides a rate of 1 per cent  for affordable housing.

"The limit of Rs 45 lakh serves as a criterion of affordability for the purpose of GST. On all other housing, GST is applied at the rate of 5 per cent without input tax credit. It has been felt that the criterion of Rs 45 lakh is too low an index of affordability anywhere across the country, and especially so in the metros," the letter said.

It will serve as an inducement to buyers in the metros if the benefit of GST at the rate of 1 per cent is extended to units costing up to Rs 75 lakh, the association said.

CREDAI pointed out that the flat rate of 5 per cent GST for under construction residential housing is causing cost build up and is acting as a deterrent for sale of under construction projects since there is no GST on completed units.

It suggested that GST rate of 1 per cent and 5 per cent, without input tax credit, should continue.

"However, an option of GST @12 per cent for normal housing/ 8 per cent for affordable housing (with 1/3rd deduction for land i.e. effective GST rate of 8 per cent for normal housing and effective GST rate of 5 per cent for affordable housing) with input tax credit (ITC) benefits in line with the scheme applicable for the works contracts for government may be revived and made applicable to the real estate," the letter said.

Lastly, CREDAI demanded that a Rs 25,000 crore stress fund for completing stalled housing projects should be deployed at the earliest.

"We shall be grateful for your much-needed intervention for the above mentioned measures required to revive the real estate sector," CREDAI said in the letter to the PM.

New Delhi, Jun 24: In a stinging attack on the Gandhi family of the Congress, BJP president J P Nadda on Wednesday said a dynasty and its courtiers have "grand delusions" of the opposition being about itself and stated that a "rejected and ejected" family is not equal to the entire opposition.

In his tweets, Nadda said it was the time for unity and solidarity, and the "relaunch of the scion for the nth time can wait", an apparent dig at Rahul Gandhi, who has been aggressive in his attacks on Prime Minister Narendra Modi for his handling of the border row with China.

Nadda said India lost thousands of square kilometres of land due to the "misadventures of one dynasty" and claimed that the Siachen glacier, where the Indian Army has a strong presence, was almost gone. No wonder India has rejected them, he said.'

The BJP president posted a news report to back his assertions about Siachen.

"One 'royal' dynasty and their 'loyal' courtiers have grand delusions of the Opposition being about one dynasty. A dynast throws tantrums and his courtiers peddle that fake narrative. The latest one relates to the Opposition asking questions to the Government," Nadda said.

Though he did not directly name the Gandhi family or any of its members, the reference was clear.

He said it was the opposition's right to ask questions and added that the all-party meeting called by Prime Minister Narendra Modi saw healthy deliberations, with several opposition leaders giving their valuable inputs.

They also fully supported the Centre in determining the way ahead, Nadda said.

"One family was an exception. Any guesses who," he asked.

Targeting the Gandhis, the BJP president said, "One rejected and ejected dynasty is NOT equal to the entire Opposition. One dynasty's interests are not India's interests. Today, the nation is united and supportive of our armed forces. This is the time for unity and solidarity. Relaunch of 'the scion' for the nth time can wait."