Nirmala Sitharaman said that the government shall act as the sponsor of the fund and infuse funds up to Rs 10,000 crore.
In another move to boost the economy, Finance Minister Nirmala Sitharaman has approved the establishment of a ‘Special Window’ to provide priority debt financing for completion of stalled housing projects in the Affordable and Middle-Income Housing sector. Addressing a press briefing after the Cabinet meeting, Nirmala Sitharaman said that the government shall act as the sponsor of the fund and infuse funds up to Rs 10,000 crore, which will provide relief to developers with unfinished projects and ensure delivery of homes to buyers. She further said that the move will help in relieving financial stress faced by a large number of middle-class homebuyers who have invested their hard-earned money.
The move is aimed at releasing a large amount of funds stuck in the housing projects for productive use in the economy. The announcement has come as another relief measure after a few big announcements such as corporate tax cut, bank recapitalisation, etc, in the recent past.
The Finance Minister also said this move will generate considerable employment and will revive the demand of cement, iron and steel industries, as they contribute to building infrastructure. The government also expects this move to relieve stress in other major sectors of the economy.
Nirmala Sitharaman said that an AIF (asset alternative fund ) will be created and the government will put in Rs 10,000 crore and others, such as SBI and LIC, will create funds of Rs 25,000 crore in all. The investment will be used to complete housing units worth less than Rs 2 crore in Mumbai, Rs 1.5 crore in Delhi-NCR, Chennai, other metros, and Rs 1 crore in other cities,” she added.
Special Window to provide last mile funding to projects meeting these criteria:
●Affordable & middle-income housing project
●On-going projects regd with RERA
●Reference by existing lender
●include stressed projects classified as NPA & NCLT
— K.S. Dhatwalia (@DG_PIB) November 6, 2019
The minister also said 1,600 stalled housing projects with 4.58 lakh homes will benefit from the alternate funding mechanism and the RBI and its Governor have discussed a viable way to reach out to homebuyers.