Nirmala Sitharaman announces Rs 25,000 cr bailout fund to complete over 1,600 stalled housing projects

In a major boost to the housing and real estate sector, the government on Wednesday approved setting up of a Rs 25,000 crore bailout fund to finance 1,600 stalled housing projects, the Finance Minister Nirmala Sitharaman said

FP Staff November 06, 2019 20:44:15 IST
Nirmala Sitharaman announces Rs 25,000 cr bailout fund to complete over 1,600 stalled housing projects
  • Nirmala Sitharaman said the government will put in Rs 10,000 crore in this alternative investment fund (AIF)

  • State Bank of India (SBI) and Life Insurance Corporation (LIC) will also contribute Rs 15,000 crore, taking the total fund amount to Rs 25,000 crore

  • Sitharaman said there are over 1,600 stalled housing projects with 4.58 lakh homes to benefit from this fund

In a major boost to the housing and real estate sector, the government on Wednesday approved setting up of a Rs 25,000 crore bailout fund to finance 1,600 stalled housing projects, finance minister Nirmala Sitharaman said.

The move will benefit many homebuyers who put in their hard-earned money to buy houses but have not received possession as their project got stuck due to non-availability of funds.

Nirmala Sitharaman said the government will put in Rs 10,000 crore in this alternative investment fund (AIF) and State Bank of India (SBI) and Life Insurance Corporation (LIC) will also contribute Rs 15,000 crore, taking the total fund amount to Rs 25,000 crore.

Sitharaman said there are over 1,600 stalled housing projects with 4.58 lakh homes to benefit from this fund.

The decision was approved by the Union Cabinet at a meeting held on Wednesday under the chairmanship of Prime Minister Narendra Modi. The fund size would increase as sovereign and the pension fund is expected to participate in this AIF.

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 major sectors of the economy.

Sitharaman said that the fund will also help projects which have been declared non-performing assets (NPAs) by the banks or are facing insolvency proceedings provided their net worth should be positive.

Alternate investment fund (AIF) will provide priority debt financing for completion of stalled affordable, middle-income housing projects, she said. SBICAP Ventures will manage the real estate AIF with an escrow account.

Sitharaman said that Rs 25,000 cr alternate fund will be provided to stalled projects in phases.

This fund would provide relief to developers that require funding to complete a set of unfinished projects and consequently ensure delivery of homes to the home-buyers, the government release said.

Since the real estate industry is intrinsically linked with several other industries, growth in this sector will have a positive effect in releasing stress in other major sectors of the Indian economy as well, it said.

With inputs from agencies

Updated Date:

also read

House of Gucci movie review: Lady Gaga wins the ensemble battle in this slick, campy family drama
Entertainment

House of Gucci movie review: Lady Gaga wins the ensemble battle in this slick, campy family drama

It is a testimony to Lady Gaga’s chops as an actor that she is the most memorable part of the film, despite the presence of Jeremy Irons, Al Pacino, Adam Driver, and Jared Leto.

West Bengal Assembly passes resolution against Centre's move to extend BSF jurisdiction
Politics

West Bengal Assembly passes resolution against Centre's move to extend BSF jurisdiction

Bengal became the second state after Punjab where such a resolution has been tabled and passed

Steve Bannon, longtime ally of Donald Trump, taken into custody on contempt charges
World

Steve Bannon, longtime ally of Donald Trump, taken into custody on contempt charges

The 67-year-old was indicted on Friday after defying a subpoena from a House committee investigating January’s insurrection at the US Capitol