Taking cognizance of the plight of home-buyers across the country whose money is stuck in stalled projects, Finance Minister Nirmala Sitharaman has announced the establishment of a Rs 25,000 crore fund to finance such projects.
The ‘Special Window’ will priority debt financing for completion of stalled housing projects in the Affordable and Middle-Income Housing sector.
Over 1600 such projects - comprising 4.58 lakh housing units are stuck across the country with lakhs of families having invested their precious life-savings as advances towards the housing units.
The government will provide Rs 10,000 crore towards the fund while other firms like SBI and LIC along with sovereign wealth funds and pension funds will contribute the remaining Rs 15,000 crore.
The fund will be set up as Category-II Alternate Investment Fund (AIF) registered with SEBI as an escrow account which will allow promoters of said stuck projects to access the capital as and when the need arises.
The fund will be managed by SBI with SBICAP Ventures Limited to be engaged as the Investment Manager. The Investment Manager will be responsible to ensure that the funds are used only for construction through appropriate safeguards mandated by RERA and also through the deployment of external project monitoring agencies.
The RBI has been consulted and has green-lighted the setup.
The fund will also allow projects having been declared as NPAs and those which are undergoing insolvency proceeds at the NCLT to be kick-started so that buyers can be benefitted by ensuring delivery of the units.
Principal Spokesperson, Government of India, K S Dhatwalia has provided further details of the projects that will be eligible for financing under the scheme.
The government hopes that the fund infusion will also help provide employment to workers and will help restore trust between buyers and developers and boost the sentiments of the housing sector as a whole.
Besides, the revival of the sector will also lead to the demand for Cement, Iron & Steel Industries giving further impetus to generate more employment. This initiative will have a positive effect on releasing stress in other major sectors of the Indian economy as well, a press release by the government said.
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