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
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.
— CNBC-TV18 (@CNBCTV18Live) November 6, 2019
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
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
Boris Johnson defends England's tier-based lockdown in letter to rebel Conservative Party colleagues
Most of England's population will fall under the two toughest tiers when the second national lockdown ends on 2 December. Around 32 million people, including in London, will fall into Tier 2
Joe Biden chooses all-female senior White House press team led by communications director Kate Bedingfield
Jen Psaki, a longtime Democratic spokeswoman who is a veteran of the Obama administration, will be Biden's press secretary
The eldest son of Donald Trump is the latest member of the president's family to become infected with the coronavirus that has killed more than 250,000 Americans