Liquidity Trap
Current global economic woes are multi fold and inter connected. At one end some of the developed economies of the world have leveraged capital to such a large extent raising concerns about ability of the Governments to repay the sum.
On the other hand Indian economy which is struggling due to fundamental stress continues to suffer, due to poor planning, policy paralysis, and corruption. Though in context to real estate in large metros has been driven by investors, with slowing in demand from consumers. Meanwhile, real estate sector is looking at Government and in turn at RBI to bring down interest rates, which would help boost sector as home loans will get cheaper for consumers.
With prices remaining in unaffordable range, consumers are shying away. India needs more houses, but of affordable types for the consumers. The current economic situation across India remains uncertain due to poor monsoon and global woes. The investors are seeing diminishing real estate returns, with individual foreign investors shying away due to possible currency devaluations and policy changes.
At such a time GIFT city master plan seems far away from realization. Currently with many office spaces available for leasing and more spaces becoming available in the future, only adds to the inventories without the ability to attract businesses. Businesses are looking for great economic environment, along with access to qualified talent who can operate in global marketplace.
Currently GIFT cannot position itself as an international hub attracting talent nor can it claim the title of city. Though the real estate and global woes arent helping it either for now.
