Further, the push towards low cost housing is also good news for retail portfolio of banks and non-banking financial companies (NBFCs) that have been struggling to boost their business amid economic slowdown.

The ASSOCHAM chief said, "The credit guarantee for SME and MSME has been increased to Rs 2 crore. This will provide support to these sectors. The focus should now be on effective implementation of the credit insurance programme so that banks and NBFCs get their money in case of defaults faster than what it has happened in the past."

"The government should also complement these actions with substantial reduction in both individual and corporate tax rates, more so as private sector investments are yet to kick-start and lower tax rates will certainly push private investments and drive economic growth," he said.

"Considering that post-demonetisation there has been a substantial surge in deposits, resultantly banks have started reducing interest rates and further rate cuts will only revive consumption demand and reinvigorate the investment cycle," Kanoria added.

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