According to the Finance Minister Nirmala Sitharaman, the construction of the Asset Alternative Fund (AIF) will benefit 1,600 stalled housing projects with 4.58 lakh homes.
As a major relief for home buyers, Union Finance Minister Nirmala Sitharaman announced on Wednesday that a ‘special window’ would be created by the government to provide priority loan financing to complete stalled housing projects. Addressing a press conference after the Union Cabinet meeting, Sitharaman said that financing would be provided in the affordable and middle-income housing sector.
The government on Wednesday announced Rs. 25,000 crore fund for stalled real estate projects. Announcing the decision, Finance Minister Nirmala Sitharaman said that the government would put in Rs. 10,000 crores in this Alternative Investment Fund (AIF) while the country’s largest lender will provide the State Bank of India (SBI) and State Insurance Company of India Life Corporation of India Rs. 15,000 crores, to take the total size of Rs. 25,000 crores Rs. He said that this fund will close more than 1,600 housing projects in 4.58 housing units across the country.
Sitharaman said, “AIF (Asset Alternative Fund) will be created. The government will create a fund of Rs 10,000 crore and others, like SBI and LIC, of Rs 25,000 crore each.”
“This investment will be used to fund housing units of less than Rs 2 crore in Mumbai, Rs 1.5 crore in Delhi-NCR, Chennai, other metros and Rs 1 crore in other cities,” he said.
The Union Finance Minister mentioned that the main criteria covered under the scheme are that the net worth of housing projects is positive. The real estate AIF will be managed by SBI Cap through an escrow account and SBI Cap will prioritize projects as per their feasibility.
On November 5 (Tuesday), Sitharaman had said that the government was seeking regular consultations with the RBI to resolve the issues facing the real estate sector. The Union Finance Minister had acknowledged that the real estate sector is facing some serious issues and the time has come to address these issues fully as the slowdown in the real estate sector has an impact on other sectors as well.