The relation between capitalism and socialism has never been stable and has always remained at daggers drawn. Why? This is indeed one of the toughest questions in the international scenario. It can be said, in this regard, that both of them adhere to entirely different and confronting philosophies and their respective applications. While the votaries of the capitalist school of economics empathizes the role of free market, the socialist school of thoughts deem that the state should exercise the predominant role. But it’s also true that economic compulsions know no bounds and for that reason a brief compromise between the two becomes necessary at times. We are witnessing the same situation at present owing to the approaches of the government in India.
It has been learnt that the Indian government is gearing up to put an end to the ongoing financial turmoil and help the players in the market of real estate to come out of the imbroglio. This became evident from the indications of the Reserve Bank of India. What are the indications therefore? The RBI indicates that the banks of the Indian soil should think about providing support to large real estate companies.
In recent times, the regulator wrote to blue-ribbon banks urging them to evaluate the financial support given to builders and to finalize a workable solution. All these have taken place since the domestic realty sector has been one of the greatest victims of the decision of the RBI to elevate interest rates to fight against the mounting inflation.
If you are attentive, it will not be difficult for you to witness the agonies of the realty sector. The foremost reasons have been the tight condition of interest rates along with the economic recession all over the globe. These have resulted into a huge slump in both of home sales and commercial property development. While the realty firms used to raise money through capital markets and private equity, these sources have become clogged up due to the downward spiral.
The banks are the only refuge therefore.
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