New Delhi: The government Wednesday approved a Rs 25,000 crore fund to help complete over 1,600 stalled housing projects, including ones that have been declared NPAs or admitted for insolvency proceedings, as it looks to boost growth by steering consumption in real estate and associated sectors. The move is likely to help 4.59 lakh housing units across the country.
Continuing with steps she began announcing within a month of Parliament approving her maiden Budget, Finance Minister Nirmala Sitharaman said the Alternative Investment Fund (AIF) will comprise Rs 10,000 crore coming from the government and the remaining being provided by state insurer LIC and the country’s largest lender SBI. The minister also said several sovereign funds have shown interest and may join the scheme at a later stage.
Meanwhile, sources said about Rs 3.5 lakh crore has been invested in the over 1,600 stalled projects, and investment of Rs 55,000 crore to Rs 80,000 crore would be needed to complete them.
The fund, to be set up as Category-II AIF registered with SEBI, will be managed by SBICAP Ventures Limited.
The AIF, which was first announced by Nirmala Sitharaman, September 14, will act as a ‘special window’ to provide loans to over 1,600 incomplete affordable and middle-lower income housing projects.
In all, 4.58 lakh housing units are being targeted to be completed with a view to generate employment as well as revive demand of cement, iron and steel industries. “Government’s intention is completion of housing projects,” Sitharaman said after the Cabinet meeting.
Sitharaman further said meetings were held with homebuyers, associations, banks and RBI during the past few months and it was decided to modify the scheme by including even those projects which have been declared non-performing assets (NPAs) by lenders, and also those which have been dragged to the NCLT for insolvency proceedings.
Sitharaman said the government is seized of the problem faced by homebuyers who are forced to pay EMIs on loans taken for buying homes but have not yet got possession and continue to shell out both loan installments and rent. She also said the Reserve Bank of India (RBI) would be soon coming out with a clarificatory note on the scheme.
Meanwhile, real estate developers’ association CREDAI welcomed the move saying, it will solve the long-pending problem of homebuyers.
“It’s a very welcome change from the initial announcement (of September 14). Now the only criteria for eligibility are networth positive projects… this will ensure that the fund is actually deployed to complete incomplete projects which are even NPA or also in NCLT,” CREDAI Chairman Jaxay Shah said.
PTI