FM Nirmala Sitharaman announces Rs 10,000cr fund for last-mile funding of stuck housing projects
The unfinished projects should not have become NPA and should not have been pending in NCLT
Finance Minister Nirmala Sitharaman on September 14 announced a special window worth Rs 10,000 crore for last-mile funding of non-NPA and non-NCLT housing projects. This will provide relief to homebuyers stuck in incomplete projects totaling nearly 3.5 lakh units across the country,
“A special window to provide last mile funding for affordable housing projects which are non-NPA and non-NCLT projects and are networth positive in the affordable and middle-income housing category will be set up,” the FM said addressing her fourth such conference since mid-August to announce measures to boost the ailing economy.
The objective is to focus on the construction of unfinished units that number around 3.5 lakh units, she said.
“The size of the fund would be Rs 10,000 crore and would be contributed by the government of India and roughly the same amount by outside investors,” she said.
The government of India on the lines of the NIIF can contribute to the fund while the rest of the investors would be LIC and other institutions and private capital from banks, sovereign funds, and DFIs, she said.
The fund shall be set up as a category II AIF Trust and would be professionally run with experts from housing and the banking sector, she said.
The FM had hinted earlier that some relief would be in the offing for homebuyers.
“We have had consultations with homebuyers, who have paid their advances and sitting without knowing what to do, and promoters that are sitting with no money to further their projects,” FM had said earlier.
Housing and Urban Affairs Minister Hardeep Singh Puri had also said remedial measures would be taken on the three big real estate projects in gurgaon, Delhi-NCR – Unitech, Amrapali and Jaypee – thanks to action by the Supreme Court.
As per Anarock research, NCR has the largest pile-up of stalled units at 1.18 lakh homes (68 percent of the total stuck stock) spread over 67 projects, with an overall value of Rs 82,200 crore. Of this, nearly 69 percent (or 83,470 units) are already sold out.
During a meeting on August 11 with Finance Minister Nirmala Sitharaman, realtors apex bodies CREDAI and NAREDCO had expressed concern that liquidity situation has worsened after the IL&FS crisis.
In a separate meeting with the finance minister, Forum for Peoples’ Collective Efforts (FPCE) had said earlier that five lakh homebuyers are stuck in various housing projects across the country. It had demanded the creation of a Rs 10,000 crore stress fund to complete such projects and provide relief to these homebuyers.
On August 23, finance minister Nirmala Sitharaman had announced that the National Housing Bank would provide additional liquidity of Rs 20,000 crore to HFCs and the minister had said that she would come up with an announcement for the real estate sector including for stalled projects soon.