The BJP-led government on Wednesday announced a booster shot for the ailing housing sector. It approved the Rs 25,000-crore fund to help middle to low-income housing projects. The government also stated that only net worth positive projects will receive help. However, net worth positive projects would include NPAs as well as projects undergoing NCLT proceedings.
In a statement, the government said, "Funding shall be provided to the projects that meet the following criteria - stalled for lack of adequate funds, affordable and middle income category, net worth positive projects (including NPAs and projects undergoing NCLT proceedings), RERA registered, and priority for projects very close to completion."
The Ministry of Finance also elaborated on what constitutes a "net worth positive project". It stated that projects where the value of receivables plus the value of unsold inventory is greater than the completion cost and outstanding liabilities at the project level will receive financial aid from the government.
The government also stated that affordable or mid-income housing projects are the ones where the housing units do not exceed 200 sq m RERA carpet area. Moreover the units must cost up to or less than Rs 2 crore in Mumbai, up to or less than Rs 1.5 crore in NCR, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and up to or less than Rs 1 crore in the rest of India.
The Union Cabinet chaired by PM Modi approved the 'Special Window' fund to provide priority debt financing for the completion of stalled housing projects. The total funds committed by the government amounts to Rs 10,000 crore. The government is seeking matching contributions from SBI and LIC to the tune of Rs 15,000 crore, taking the total to Rs 25,000 crore. The fund will be set up as a Category-II AIF (alternate investment fund) debt fund registered with SEBI and would be professionally run.