NEW DELHI: The government has approved a fund of Rs 25,000 crore for the reviving of stalled housing projects across the country. Finance Minister Nirmala Sitharaman informed in a press conference on November 6, 2019. The cabinet has also approved making special provisions to provide priority loans to projects of affordable houses.
Nirmala Sitharaman informed in a press conference that the government will provide 10,000 crore rupees in this Alternative Investment Fund (AIF). SBI and LIC will provide the remaining Rs 15,000 crore.
“There is a special window that will be made, which will be an alternative investment fund (AIF). The government will first fund Rs 10,000 crore. We’ve spoken to SBI and LIC to place funds. The fund is expected to have a starting value at around Rs 25,000 crore. A lot of homebuyers have approached us. They are stuck in a situation where they have paid an advance but don’t have their housing units built. Approximately 1,600 projects are stalled, which is around 4.58 lakh housing units.”
“Even if the project is an NPA can it be covered under this scheme. Even if a project is under the arbitration of NCLT, but only if the project has not been announced as liquidation worthy, can it be covered under this AIF. The main criteria to be covered under this scheme is that the project’s net worth must be positive,” she said.
“The projects need to be registered in RERA (Real Estate Regulation and Development Act) and their net worth should be positive. Even if the project has been declared an NPA or dragged to NCLT but not asked for liquidation will also benefit,” she added.
Incomplete housing projects worth less than ₹2 crores per unit in Mumbai, ₹1.5 crores in other metros, including the national capital region (NCR), and ₹1 crore in other parts of the country will benefit from the move, Sitharaman said. The funds will be used to complete stalled projects.
SBICAP Ventures Ltd will run the AIF and ensure the funds are utilized only for the completion of the intended projects.
AIF is a privately pooled investment vehicle that collects funds from sophisticated investors, whether Indian or foreign, for investing them in accordance with defined policy. The real estate AIF cleared by the cabinet is a category II AIF and will not undertake borrowing activities other than to meet day-to-day operational requirements.
Real estate projects worth ₹1.8 trillion are stalled across India, according to Anarock Property Consultants.
The focus on real estate is part of the government’s broader plan to kick-start economic growth, which slowed to a six-year low of 5% in the quarter ended 30 June.