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    Govt sets up Rs 25,000 crore alternative investment fund to revive realty sector

    Synopsis

    A survey showed that around 4.58 lakh housing units were stuck in India.

    PTI

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    Finance Minister Nirmala Sitharaman on Wednesday said the government would set up an alternative investment fund (AIF) worth Rs 25,000 crore to provide relief to developers with unfinished projects to ensure delivery of homes to buyers.

    While the government has earmarked Rs 10,000 crore towards the fund, Life Insurance Corporation of India and State Bank of India would also infuse money.

    Briefing media after a Cabinet meeting, Nirmala Sitharaman said an internal survey showed that around 4.58 lakh housing units were stuck in India with over 1,600 realty projects stalled.

    The government will act as the sponsor of the fund and infuse funds up to Rs 10,000 crore. The AIF will provide relief to developers with unfinished projects and ensure delivery of homes to buyers.

    SBICAP Ventures will be the investment manager for the fund.

    The Cabinet also approved an establishment of 'Special Window' to provide priority debt financing for completion of stalled housing projects in the affordable and middle-income housing sector.

    Special Window to provide last mile funding to projects meeting these criteria:
    • Net-worth positive
    • Affordable & middle-income housing project
    • On-going projects regd with RERA
    • Reference by existing lender
    • Include stressed projects classified as NPA & NCLT

    The government expects the decisions will help relieve financial stress faced by large number of middle-class homebuyers who have invested their hard-earned money.

    This is also expected to release large amount of funds stuck in these projects for productive use in the economy.
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    3 Comments on this Story

    Spaceman 356 days ago
    Throwing good money after bad money
    Spaceman 356 days ago
    The last nail in the country''s economic coffin.
    Sanjay Mittal357 days ago
    Interesting to see the way these funds are disbursed as well how long would it take the stressed developer to sell the unsold inventories in this kind of depressed real estate market. But the intent is correct
    The Economic Times