Rs. 10,000 crore stressed fund has been announced by FM Nirmala Sitharaman to complete the stalled projects.

By Abhay Shah, Realty Quarter

Finance Minister Nirmala Sitharaman announced Rs 10,000 crore special window to support for last-mile funding of non-NPA and non-NCLT housing projects on September 14. Incompleted projects of almost 3.5 lakh units throughout the nation will be relieved.

The FM said at the fourth such conference since mid-August it announced initiatives to increase ailing economies, “That it will provide last-mile financing to housing projects that are non-NPA or non-NCLT projects and are networth beneficial in the affordable and middle-income housing bracket will be set up.”

She said the objective is to concentrate on the construction of incomplete units which are around 3.5 lakh. “The Fund’s scope would be Rs10,000 crore, and the Indian Government would contribute to it, with external investors making about the same contribution,” she said.

The government of India on the NIIF lines can assist the fund while the other investors will be LIC and other organizations and private capital from banks, sovereign funds and DFIs’, she said.

The fund will be established as an AIF Trust of category II and will be professionally managed by household and banking sector experts, she said. Previously the FM had indicated that homebuyers would receive some relief.

“We consulted homebuyers who paid their advances and sat without understanding what to do and developers that are sitting without funds to further their projects,” FM said before.

The Minister of Housing and Urban Affairs, Hardeep Singh Puri, also stated that thanks to Supreme Court action, the remediation would be done in the three major real estate projects in Delhi-NCR – Unitech, Amrapali and Jaypee.

According to Anarock, NCR has 67 projects, covering a total value of Rs 82,200 crore, the biggest stack of stalled units with 1.18 lakh homes (68% of the total stuck stock). Almost 69% (or 83,470 units) of this is already sold out.

On 11 August, during a meeting with Minister of Finance Nirmala Sitharaman, realtors apex bodies CREDAI and NAREDCO expressed their worry that after the IL&FS crisis liquidity situation has deteriorated.

The Forum for Peoples Collective Efforts (FPCE) said previously in a separate meeting with the Minister of Finance that five lakh home buyers are stuck in several housing projects across the nation. They had requested the establishment of a Rs 10,000 crore stress fund to finish such projects and provide relief to these homebuyers.

On 23 August, the minister of finance, Nirmala Sitharaman, announced that HFCs will get Rs 20,000 crore additional liquidity from the National Housing Bank and that she will shortly be making a notification for the real estate sector, even for the projects stalled.