The Modi Government on Wednesday announced a Rs. 25,000-crore fund for stalled real estate projects, in a bid to boost the real estate sector.
Finance Minister Nirmala Sitharaman announcing the decision, said, the government will put in Rs. 10,000 crore in this Alternative Investment Fund (AIF) while country’s largest lender State Bank of India (SBI) and state-run insurance company Life Corporation of India (LIC) would jointly provide another Rs. 15,000 crore, taking the total size to Rs. 25,000 crore.
The funds would help over 1,600 stalled housing projects comprising 4.58 lakh housing units across the country.
The government has approved the setup of a special window to provide priority debt financing for the completion of stalled housing projects in the affordable and middle-income housing sector, the FM said.
The move is aimed at reviving the real estate sector and generating considerable employment.
The cash-flow squeeze in the system has halted building projects that have left numerous homebuyers stranded even after paying their monthly instalments.
If the real estate sector is revived alternate sectors such as demand for cement, iron and steel industries would also lead.
The government further said that the size of the Fund would increase further with participation from sovereign and pension funds.
The Finance Minister said the Fund can be utilised even by the projects been declared as non-performing assets or those facing insolvency proceedings.