Finance Minister Nirmala Sitharaman on Wednesday announced that the government has decided to set up a `Special Window` in the form of Alternative Investment Fund (AIF) to provide priority debt financing for the completion of stalled housing projects that are in the affordable and middle-income housing sector. The corpus size of the AIF would be scaled up to Rs 25,000 crore with Rs 10,000 crore committed for completing housing projects stuck for years. The AIF would meet fund requirements of 1,600 stalled projects where the money of 4.58 lakh homebuyers are stuck, the FM said.

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The move is expected to help the real estate sector but can have far-reaching impact helping the revival of the Indian economy as well as job generation. Deo Shankar Tripathi, MD and CEO of Aadhar Housing Finance believes that the move will also help other segments like cement, steel and lot of many industries linked to real estate.

"The announcement by the finance minister for creation of Rs 25,000 Cr real estate fund is one of the far-reaching decisions taken by the government to provide last mile funding and reviving the real estate sector. This will revive 80% of the stalled projects and will now cover all the projects irrespective of their stage of construction, whether they are NCLT or NPA, excepting those which are in liquidation are excluded. This is a modification of the earlier announcement of 14th September where the NPA and NCLT cases were not covered. This announcement will definitely not only revive the real estate sector but also will give a big boost to the Indian economy. It will create a multiplier effect in job creation and boost the other segments like cement, steel and lot of many industries which are linked with real estate .So, I think, this is an extraordinary decision taken by the government and will be well accepted by everybody," he said.

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Apart from this, the decision will also help restore buyer confidence. Kiran John, Joint Managing Director, Terapact said that more projects can be included to extend the benefit.

"This will create a new avenue of relief and will help restore some buyer confidence. Most of the benefit will be felt in Mumbai and NCR. One question still unanswered is whether the programme will be expanded to include a wider range of eligible projects, as the current definition does limit the inclusion of a vast number of projects that could benefit. Demand in the affordability segment has been strong and in several cases sufficient to fund cash flow issues already. Badly planned and executed projects may need to resort to heavy discounts to sell inventory even with this help. Overall buyer sentiment will improve knowing that the government is rolling out a concrete plan to boost the sector and a consolidated effort has already been put into motion," he said.

The Special Window cover projects that are classified as NPA or where NCLT proceedings have already started but with the rider that they meet other eligibility criteria.