Credai, Naredco anticipate metal costs to come back down after govt’s measures

Realtors’ our bodies Credai and Naredco have hailed the federal government’s measures to carry down the costs of metal and cement and hoped that the producers will move on the advantages to their prospects.

Both the associations have been elevating the problem of a pointy rise in metal and cement costs within the final one yr, leading to a rise within the general development price. Many builders have raised housing costs to offset the rise in development prices.

On Saturday, the federal government waived customs obligation on the import of some uncooked supplies, together with coking coal and ferronickel, utilized by the metal trade, a transfer that can decrease the fee for the home trade and cut back the costs. The obligation on exports of iron ore has been hiked as much as 50 per cent, and some metal intermediaries to fifteen per cent.

Credai president Harsh Vardhan Patodia mentioned: “We are pleased with the finance minister and the government’s intervention to control the rise in the cost of raw materials and in turn, control inflation as the Indian economy had stayed resilient while grappling with the strains of cost inflation of raw material prices but had disrupted the growth of the real estate sector in the last 18 months”.

He famous that the federal government’s transfer to cut back import duties on metal merchandise ought to present a sigh of reduction to all stakeholders.

“Additionally, a reduction in import duty of iron ore and steel intermediates will further bolster the availability of raw materials domestically, cool off the prices of steel products, and help tide the rise in prices of projects, strengthening consumer sentiment,” Patodia mentioned.

The finance minister’s assurance to enhance logistics and assist home availability of cement and decreasing customized duties on coal merchandise used within the manufacturing of cement could have a optimistic influence on the price of the commodity, he added.

“Furthermore, a reduction in prices of fuel tax to pre-Covid levels will help bring down the transportation costs of all raw materials and essentials in industries agnostic of their businesses and reduce the pressure on the end consumers,” Patodia mentioned.

Going ahead, the Credai president prompt that the state authorities ought to lower down on state duties on gas to have a direct influence on the rise in inflation.

Patodia hoped that “manufacturers will pass on the price cuts to end-users”.

“This will help the real estate developers negate increased construction costs over the last 2 years, which will only help prospective homebuyers,” he added.

Colliers India CEO Ramesh Nair mentioned: “Developers have been under pressure to raise prices as the cost of construction materials has seen a double-digit surge in recent times. As per Colliers’ initial estimates, the cost of construction was likely to rise by a further 8-9 per cent by the end of 2022”.

In this state of affairs, he mentioned, the federal government’s intervention to manage this rise by rationalising duties and taxes on key inputs is well timed and is prone to have a optimistic trickle-down impact on the tip customers.

Rajan Bandelkar, President, Naredco, mentioned, “The move to reduce the import duty on raw materials of iron and steel and steps to ease the supply of cement would help curb the inflation and the soaring prices in the real estate segment”.

He mentioned the excessive enter price has been impacting the builders over the previous a number of months and property costs too have seen an uptick of late, bringing issues for the nascent restoration of the realty sector within the nation.

“Now, the measures should help further improve the home buyer sentiment. Better availability of cement through improved logistics also comes as a welcome move. However, the steps should be complemented with GST rationalisation on cement, which forms a major part of the construction expenditure,” Bandelkar mentioned.

On Saturday, Finance Minister Nirmala Sitharaman mentioned the federal government is calibrating customs obligation on uncooked supplies and intermediaries for iron and metal to cut back their costs. Import obligation on some uncooked supplies of metal will likely be lowered.

Export obligation on some metal merchandise will likely be levied, she mentioned.

The finance minister mentioned that measures are being taken as much as enhance the supply of cement and thru higher logistics to cut back the price of cement.