Page 30 - Nuvama | IC Report 2023

• DE-GLOBALISATION • DEREGULATION • DEBT • DEMOGRAPHY • DEMOCRACY

On this front, the Indian government has made significant progress, courtesy the bankruptcy
code (The Insolvency and Bankruptcy Code, 2016). The IBC streamlines the process and facilitates
faster resolution of distressed firms by putting in strict timelines for the resolution. After teething
issues; the law is now working quite effectively in recognising the sick firms and quickening their
resolution process.
In all, the business climate in India has dramatically improved over the last few years, which is attracting
investments and nudging businesses towards building scale.

Households: Beneficiaries of reforms too

Reforms have not only touched government and businesses, but also households at large

RERA: Empowering homebuyers
According to the World Bank, secure property rights and efficient land registration institutions are
Historically, the cornerstones of any modern economy. They instil confidence among individuals and businesses to
real estate market invest in land, allow private companies to borrow – using land as collateral – to expand job opportunities,
in India was lopsided, and enable governments to collect property taxes.
in favour of builders. Historically, the real estate market in India was lopsided, with consumers having limited bargaining
RERA changed it
power, whereas large builders and developers had an upper hand. During the 2000s, the urban property
boom created large excesses. Developers made grand promises to consumers and raked in loads of
funds. However, the funds were utilised as equity for new projects (which were levered up) rather than
for completing the existing ones. These excesses unraveled post GFC as liquidity tightened, and the
episode ended badly with tons of consumer grievances, which dented buyer confidence.

575
Exhibit 9:
Post-RERA Highest in a
homebuyers’ decade
confidence 525
returning
475
(12M sum, msf) 425

375

325

275
Nov ‘12 Nov ‘13 Nov ‘14 Nov ‘15 Nov ‘16 Nov ‘17 Nov ‘18 Nov ‘19 Nov ‘20 Nov ‘21 Nov ‘22
India’s top 7 cities real estate sales
Source: PropEquity, Nuvama Research

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