Union finance minister Nirmala Sitharaman on 6 Nov ’19 announced that the govt. is going to provide a Rs 25,000 crore bailout fund for debt financing of over 1,600 stalled projects in the middle income and affordable housing sector.
The ‘special window’ will be structured as an Alternate Investment Fund (AIF) to provide priority debt financing for completion of blocked housing projects. Total infused amount would be Rs 25,000 crore with the government infusing Rs 10,000 crore in the fund, State Bank of India (SBI) and Life Insurance Corporation of India(LIC) together providing Rs 15,000 crore.
AIF fund size is expected to increase as the sovereign and pension fund may also contribute to the AIF.
This will provide financing to 1,600 stalled housing projects comprising 4.58 lakh housing units across the country, as per the finance minister.
The move is also aimed at generating employment as well as reviving demand in cement, steel and iron industries. It is also expected to relieve stress in the major sectors of the economy.
It is noteworthy that with the triple effect of RERA, demonetization and GST, real estate sector in India is reeling under a massive lull in demand. This is certainly a beneficial move in the interest of home buyers who have earlier showed confidence in the sector while paving way for new investors looking for a right revival time for real estate investments.