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Rs 10K CRORE fund for stalled projects!
The Times of India  |  September 30, 2019

PRABHAKAR SINHA

The government has come out with a festival bonanza by creating a Rs 10,000 crore fund as last-mile capital to complete stalled projects in the budget and mid-segment housing

 

The government is taking several measures to address key issues and support major sectors, including real estate, in a bid arrest slowdown in the economy.

 

Addressing one of the major issues of stalled projects in the real estate sector, which is owing to fund crunch, the government has created a fund to provide last-mile funding for housing projects. However, this is available only to those projects which have not defaulted to banks and NBFCs, have not gone to NCLT due to delay in their completion, yet are stuck due to lack of funding.

 

The government will contribute Rs 10,000 crore to the fund. Public and private companies can also contribute to this fund.

 

As the fund is meant for affordable and midsegment housing, it is a kind of boost to the housing sector and a festive treat for lakhs of homebuyers who have been anxiously waiting for the possession of their flats, says Anuj Puri, chairman of Anarock Property Consultant.

 

“However, since it doesn’t include projects that are under NPAs and NCLT, there is a possibility that not all homebuyers will get relief,’’ Puri said. Also, the fund is for projects in the affordable and mid-segment housing only and homebuyers in the luxury segment may have to wait even further.

 

The proposed fund will give many developers an opportunity to complete their stalled projects. Puri further said that this fund is not enough to give relief to the sector as a whole. There are more than 5.5 lakh units stuck or delayed in Top 7 cities alone, which would be much higher if we consider all the cities and towns in the country.

 

Niranjan Hiranandani, President of NAREDCO, said that the government’s latest push will help a great deal in mitigating the woes of all the affected homebuyers in locations like the Delhi NCR.

 

The completion of the project would help unlock huge assets and make the market liquid and functional. It will also help developers who are now not able to launch new projects due to bad market condition created by stalled and delayed projects, Hiranandani said.

 

Getamber Anand, chairman of Credai, said the government should have asked the RBI to allow banks to restructure loans so that funding could be done.

 

Once projects are complete and families start living in these houses, demand for household items like refrigerators, ACs, washing machines, furniture, other electric appliances like bulbs and fans, sanitary fittings and fixtures, etc, would be created, which would go a long way in reviving economic activities.