india

Updated: Jul 18, 2020 23:41 IST

The Centre on Wednesday approved a Rs 25,000 crore fund to help complete over 1,600 stalled housing projects and endorsed setting up of a special window to provide priority debt financing for completion of stalled projects in the affordable and middle-income housing sector.

Announcing a rescue plan for homebuyers at a press conference, Finance Minister Nirmala Sitharaman said the government will infuse Rs 10,000 crore out of the Rs 25,000 crore fund for stalled real estate projects. The remaining amount will be provided by the government-owned Life Insurance Corporation (LIC) and the State Bank of India.

“We have come up with a special window that will be structured as an Alternative Investment Fund (AIF) which will pool all these investments. Government will infuse Rs 10,000 cr,” Sitharman said.

Funds will be set up as Category-II AIF Fund registered with Securities and Exchange Board of India (SEBI).

“A rough estimate has shown that over 1600 housing projects with 4.58 lakh housing units are stalled,” she said.

Watch: Centre approves Rs 25,000 crore fund for stalled housing projects

In a statement, the government said, “The Special Window would provide funds to stalled housing projects enabling them to complete unfinished projects and consequently ensure delivery of homes to a large number of home-buyers. 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. This will also restore trust between buyers and developers and boost the sentiments of the housing sector as a whole and release large amount of funds stuck in these projects for productive use in the economy.”

It said the creation of special window for affordable and middle income housing projects would revive the real estate sector and generate considerable employment. It would also lead to demand of cement, iron and steel Industries and boost employment.

“This initiative will have a positive effect in releasing stress in other major sectors of the Indian economy as well,” it said.