Under AIF, Govt, SBI, LIC to fund to revive stalled housing projects: FM Nirmala Sitharaman
THE Government’s belated approval for setting up of a Rs 25,000-crore alternative investment fund (AIF) to revive about 1,600 stalled housing projects across top cities in the country is appreciated. The housing sector is undoubtedly a major job creator besides enhancing national revenue. There is no denying this is among the worst affected sectors impacted by cash crunch and lack of confidence between the builders and home buyers as several real estate players failed to provide flats to the buyers as scheduled due to varies reasons. The AIF as Okayed by the Union Cabinet headed by Prime Minister Narendra Modi on Wednesday, November 6 will be a special window to provide priority debt financing for completion of projects in the affordable and middle-income categories, Finance Minister Nirmala Sitharaman said. The move expected to bring significant relief to homebuyers as well as businesses. The government has decided to include projects declared as non-performing assets and those which are undergoing insolvency at the National Company Law Tribunal (NCLT) to be considered for financing from the AIF. The funding will be possible only if they are registered under the Real Estate (Regulation and Development) Act or RERA.However, those which have already got orders from NCLT for liquidation will not be considered. The Cabinet decision is a modification of an earlier stimulus package announced by the FM in September, when she had kept NPA and insolvency projects out of the AIF purview. The inclusion of projects under NPA and NCLT proceedings would help cover almost 80 per cent projects in some of the key property markets such as NCR and Mumbai., Finance Minister Nirmala Sitharaman said the government will put in Rs 10,000 crore in this alternative investment fund (AIF) while SBI and LIC would provide Rs 15,000 crore, taking the total size to Rs 25,000 crore. This will finance 1,600 stalled housing projects comprising 4.58 lakh housing units across the country, she added. The move is aimed at generating employment as well as reviving demand of cement, iron and steel industries. It is also aimed at relieving stress in the major sectors of the economy. The fund size would increase as sovereign and pension fund are expected to participate in this AIF. The AIF can be utilised even by the projects declared non-performing assets or are facing insolvency proceedings, Sitharaman added. Under AIF scheme is intended to fund 1,600 stalled housing projects comprising 4, 58,000 housing units across the country .On August 12, 2019 The Business Standard reported “In a first-of-its-kind meeting, real-estate developers, industry bodies, and homebuyer associations together met Finance Minister (FM) Nirmala Sitharaman and Minister of Housing and Urban Affairs Hardeep Singh Puri discuss the problems related the sector. Sitharaman, while giving an assurance to industry players that issues of liquidity, regulations, and taxes would be looked into, made it clear that the interests of homebuyers would be given utmost importance and all stalled projects were to be completed soon.Representatives of industry bodies, included National Real Estate Development Council (Naredco), Confederation of Real Estate Developers’ Associations of India (Credai), Central Advisory Council of the Real Estate Regulatory Authority (Rera), and Federation of Apartment Owners Association (edited by PK Chakravarty).