PANJIM: The decision by the government to scrap Rs 500 and Rs 1000 currency notes has been welcomed by the builders in Goa. The general sentiment was that it would help clean the system and bring clarity.
Desh Prabhudessai, chairman, Credai Goa said it was a welcome move by the government. Mr Prabhudessai said “For a very long time a lot of the black money that poured into this industry would be in these high denominations. This move will eradicate the problem in one go. Yes, there will be short term problems in various sectors like retail. At petrol pumps I heard that there was panic. I think the government should have circulated Rs 500 notes from banks in the system.”
The realty sector, Mr Prabhudessai said, had changed over the years. These days he felt no one dealt in cash and with housing loans now available up to 85% and the 15% being paid by the party was usually in cheque which meant it was white money. With regards to a drop in prices, he did not believe that would be the case.
Kula Shekhar Kantipudi of Milroc Constructions said the market would slow down in the short term but in the long run it would be a much cleaner industry. Asked if there would be drop in prices in houses, he believed that would be the case in the higher segment, the segment that featured people looking for a second home.
Satish K of A&A Constructions said he was personally very happy this was done because the black money business would stop.
Amey Naik of Shoolin Dev said it was a good move but it was also important for the govt to ensure that other industries were also sorted out. The hardware industry he said operated only on cash and no one was willing to take the risk of accepting cheques. A bounced cheque was not feared by the person issuing it. These systems he felt had to be sorted out.
Raja Seetharaman, director, Propstack felt home buyers who prefer to pay cash to save taxes will get impacted. Developers also pay cash to some of their unorganised building material suppliers. Their inability to make this cash payment will negatively impact the progress of the project and rotation of capital. In the long term prices are bound to correct downwards and there will be increased transparency in the market. While this move will be challenging in the short term for developers, it will stabilize the industry and give it more credibility.