Around 4.58 lakh residential units pending in 1,600 housing projects across the country will get a lifeline now.
In another booster dose for the economy, the Union Cabinet has approved creation of Rs 25000 crore fund to finish the stalled housing projects, bringing cheers to those waiting for the homes.
Union Finance Minister Nirmala Sitharaman said on Wednesday after the Cabinet meeting that the government would a special window which is to be structured as an alternative investment fund and the Centre would infuse Rs 10,000 crore in the relief fund.
“Government will give Rs 10,000 crore. We have already spoken with institutions like SBI, LIC and so on, who together will also put money which will touch Rs 25,000 crore. This will be kept open. Several sovereign funds have also expressed interest to come into it. Gradually, we will keep adding to the AIF corpus,” the Finance Minister said.
This comes as a big relief to the sector which has been finding it tough to raise funds for the completion of the projects due to dried up resources specially from the NBFCs.
The move also comes as part of the efforts to spur the economic growth through a series of measures.
SBI Capital will manage the fund which will be released in tranches via an escrow account depending on the completion of the approved phase. Only RERA-registered projects with positive net worth can avail the benefits of this fund.
The funds extended to promoter of stalled projects will be responsible to complete it and deliver the homes to homebuyers, FM Sitharaman. The funds in escrow account cannot be touched even by banks to settle pending dues of a builder, she further said.
Around 200,000 units are stalled in the National Capital Region (NCR) alone while Mumbai has around around 100,000 units. Incomplete housing projects worth less thanRs2 crore per unit in Mumbai,Rs1.5 crore in other metros, including the national capital region (NCR), andRs1 crore in other parts of the country will benefit from the move.