- The special window will also get investments from institutions like LIC and the SBI which will take the corpus to Rs 25,000 crore.
- The move is expected to cheer up those who have been affected by the stalled housing projects and provide relief to a slump-hit sector amid slowing consumption.
- The finance minister also said that those projects which have been declared as NPAs by banks and those facing bankruptcy proceedings under the NCLT but not referred for liquidation will also be included in the scheme.
As many as 1,600 projects with 458,000 dwelling units will potentially be covered under the dispensation. The government will contribute Rs 10,000 crore and the rest will come from LIC and State Bank of India besides sovereign wealth funds and pensions funds.
“The creation of (a) special window for affordable and middle income housing projects would revive the real estate sector and generate considerable employment,”
the government said in a release, adding that this will spark job creation as well as increased demand for cement and iron and steel. “This initiative will have a positive effect in releasing stress in other major sectors of the Indian economy as well.”
Those eligible will be incomplete housing units of less than Rs 2 crore in Mumbai; less than Rs 1.5 crore in Delhi-NCR, Chennai, Kolkata, Bengaluru and Pune; and less than Rs 1 crore in other parts of the country. “All those projects in affordable and middleincome category will be now finding relief,” Sitharaman said.
‘RBI to Issue Clarificatory Note’
Sitharaman was addressing reporters after a meeting of the cabinet chaired by PM Narendra Modi on Wednesday.
“This will, in due course, help relieve the financial stress faced by a large number of middle-class home buyers who have invested their hard-earned money,” the government said.
Any project irrespective of stage of completion will be eligible if it is net worth positive and has Real Estate (Regulation and Development) Act or Rera registration, Sitharaman said.
She said the government had held detailed discussions with banks and the Reserve Bank of India (RBI) on dealing with nonperforming assets (NPAs). The central bank will issue a clarificatory note on the matter, she said.
Sitharaman had announced the fund on September 14 but it had been restricted to providing last-mile funding for projects that were not in bankruptcy court or already tagged as bad debt. These conditions have now been relaxed after detailed consultations with builders as well as homebuyers, she said.
A government official said the total value of the homes that are stuck is estimated at Rs 1.39 lakh crore and about Rs 55,000-80,000 crore will be needed to complete them.
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59 Comments on this Story
Som Karamchetty355 days ago
It is a good measure by the government.
An unfinished and half-finished home is worth only scrap value. Once it is finished, the house is likely to gain full value.
Home buyers have perhaps committed some funds and have promised other funds (by way of mortgages). It is just that they should gain that value with government assistance. If the value exceeds such value, government should get a share on the appreciation for its investment. That would be smart investment strategy by the government as the custodian of the taxpayer funds. The developers should not benefit from such help unless the situation is in spite of their best efforts.
Prakash Ramiah356 days ago
1600 projects,450000 houses,25000cr is 16 cr,280 houses,5 lacs each to complete.is it possible 40 percent yet with 5 lacs maximum three week work can be only done
Kimneiniang Tungnung356 days ago
Correct me if I’m wrong:- Banks lends large amount of money to corporates/companies under the approval of our ministers and these cos in turn donates to our politicians/ministers, which gives them enough funds to buy MLAs etc which in turn gets them elected and have power. So when these Big companies and corporates stopped paying the Loan, the govt rescue these defaulters with the help of other profit making state owned banks ??? This is why people like Nirav Modi are becoming a celebrity rather than a criminal!