Centre forms Rs 25,000 crore fund to rescue stalled housing projects


New Delhi, Nov 6 (IANS): In a move to protect over 4 lakh home buyers, the Centre on Wednesday formed a Rs 25,000 crore fund with participation from state-run LIC and the State Bank of India (SBI) to restart stalled projects.

Following a cabinet meeting here, Finance Minister Nirmala Sitharaman announced that the ministry has formed an Alternative Investment Fund (AIF) with an initial investment of Rs 10,000 crore from the government, while the rest will be invested by the Life Insurance Corp (LIC) and the SBI.

The decision, which will also benefit projects that have been categorised as non-performing assets (NPAs or bad loans) or are facing proceedings in the National Company Law Tribunal (NCLT).

According to Sitharaman, the AIF will aid in completing 1,600 stalled projects across the country that will benefit about 4.58 lakh home buyers. She said that to make the scheme effective the size of the fund would be scaled up constantly and sovereign wealth funds, pension funds may also join the AIF later.

The Minister also said that SBI Caps will be the lead professional manager of the AIF and will assess the viability of stalled projects.

As per the guidelines, funds will be released into an escrow account maintained by the project manager. Money from it will be for projects which are near completion.

Sitharaman further said that there is no cap on the scale of completion of project but the fund will prefer releasing money for housing units where the completion level is higher.

"The idea is to provide immediate relief to home buyers who are paying EMIs for their stalled housing units and are also forced to pay rent due to delays," the Finance Minister said.

It has been decided that the AIF will be registered with market regulator Sebi, while the projects that qualify for funding will be required to be Real Estate Regulation Act (RERA) certified.

 

 

  

Comment on this article

  • AnoNymouS, Mangalore

    Thu, Nov 7 2019

    The projects are stalling because of demonetisation and increase in Registration tax. Now they are taking our hard earned monies from the LIC and make that bankrupt as well.

    DisAgree Agree [2] Reply Report Abuse

  • KS Mayya, Mangalore/Bangalore

    Thu, Nov 7 2019

    This is ridiculous.
    1. Builders charge higher price when supply is short. They do not charge lower prices when supply is high. Instead, stall construction work. Why should Govt incentivise this bad behaviour?
    2. Government over the years have raised the guidance value. Apparently, it can go only up and never down. Government is fully responsible for keeping the prices high because, even though builders are ready to sell are lower price, they cannot sell below the guidance value.
    3. Market should be let to function according to its dynamics. Market crash is also fine, as demand will rise as soon as prices fall. Government should stay as far away as possible from this.
    4. Government need not keep the real estate market artificially up, unless some babus and politicians also have their stake in it and want the prices to continuously go up and up only.
    5. When the markets are down, real estate prices should also come down.

    DisAgree Agree [9] Reply Report Abuse

  • Save My India, India

    Fri, Nov 8 2019

    Well said!!!

    DisAgree Agree Reply Report Abuse

  • Anilkumar, Mangalore

    Thu, Nov 7 2019

    Looks like yet another disguised path for diverting public money to private and "favoured" parties in the name of injecting money thus legalising diversion of fund. Probably Nirav Modi or Vijay Malya would have done wonders if same money was given to them in similar disguised way.

    DisAgree Agree [9] Reply Report Abuse

  • YOGI THUNTA, MANGALURU - NEAR PUMPWELL CIRCLE

    Wed, Nov 6 2019

    NIRMALA SHOULD RESIGN FROM HER POST AS SHE DONT WHAT IS DOING WITH PUBLIC MONEY ! INJECTING THE MONEY FOR BOOSTING ECONOMY WHERE SHE LEARNT FROM !!! MAY BE HER COLLEAGUE SMIRIT HIRANI TV SERIALS WHERE THE PEOPLE WEARING IN THE KITCHEN AND BEDROOM THE DESIGNER DRESS WITH HEAVY JEWELRY !

    DisAgree [3] Agree [22] Reply Report Abuse

  • NITINd, karkala

    Wed, Nov 6 2019

    is she running family business with our hard earned money. she is distributing our hard eared money to few corporate friends to make them happy.

    DisAgree [2] Agree [24] Reply Report Abuse

  • Chunna lagaya, Belman, karkala

    Wed, Nov 6 2019

    There are 1600 projects stalled. Each required 100 to 300 crore to complete these projects. If 25000 Crore divided among these 1600 projects each project may 15 crores.. Pea Nuts..,

    Modi government completely destroyed real estate business. Now why trying to patch up?

    DisAgree Agree [19] Reply Report Abuse

  • Anil, Dubai

    Wed, Nov 6 2019

    100% divided into = 25% to relince, 25% to adni, 25% to Shah & Co, 25% to … !!??? (reserved for secret)

    DisAgree [1] Agree [17] Reply Report Abuse

  • Dylan, Mangalore

    Wed, Nov 6 2019

    Aam adami totally ignored. Pampering everyone except the aam adami. This lady will destroy the nation. What about the onion price, touching Rs. 100/-

    DisAgree [1] Agree [34] Reply Report Abuse

  • I wish I was There, Bahrain

    Wed, Nov 6 2019

    Cutting Onions few people were crying, but now by electing BJP/Modi whole India is crying.

    DisAgree Agree [26] Reply Report Abuse

  • Jossey Saldanha, Atlanta

    Wed, Nov 6 2019

    Funds will now be diverted for Family, Friends & Relatives ...

    DisAgree [1] Agree [35] Reply Report Abuse


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