Centre approves Rs 10,000 crore fund for unfinished housing projects

Mangalore Today News Network

New Delhi, Nov 06, 2019: The Union Cabinet on Wednesday approved setting up a special window to provide priority debt financing for completion of stalled housing projects in the affordable and middle-income housing sector.

Announcing a rescue plan for homebuyers at a press conference, Finance Minister Nirmala Sitharaman said the government will infuse Rs 10,000 crore out of a RS 25,000 crore fund for stalled real estate projects, Hindustan Times reported.

 

“We have come up with a special window that will be structured as an Alternative Investment Fund (AIF) which will pool all these investments. Government will infuse Rs 10,000 cr. Government, Life Insurance Corporation and State Bank of India will infuse Rs 25,000 cr,” Sitharaman said.

“A rough estimate has shown that over 1600 housing projects with 4.58 lakh housing units are stalled,” she said.

Funds will be set up as Category-II AIF Fund registered with Securities and Exchange Board of India (SEBI).

In a statement, the government said, “The Special Window would provide funds to stalled housing projects enabling them to complete unfinished projects and consequently ensure delivery of homes to a large number of home-buyers. This will, in due course, help relieve the financial stress faced by a large number of middle class home buyers who have invested their hard earned money. This will also restore trust between buyers and developers and boost the sentiments of the housing sector as a whole and release large amount of funds stuck in these projects for productive use in the economy.”

It said the creation of special window for affordable and middle income housing projects would revive the real estate sector and generate considerable employment. It would also lead to demand of cement, iron and steel Industries and boost employment. “This initiative will have a positive effect in releasing stress in other major sectors of the Indian economy as well,” it said.