Real estate bonanza: How govt hopes to prevent Rs 25,000 crore fund misuse
BusinessToday.In November 7, 2019
The Modi government's Rs 25,000-crore bonanza for the real estate sector will help complete over 1,600 stalled housing projects in India, including the ones that have been declared NPAs or admitted for insolvency proceedings. The booster dose for the real estate will provide much-needed relief for the sector.
As per the government, a special window will be formed to provide capital for realtors to finish the stalled projects. To monitor if the realtor concerned has utilised allocated funds for a particular housing project, the government has said it will ensure all standard financial controls maintained by RERA (Real Estate (Regulation and Development) Act, 2016) are adopted by the companies. "The investment manager along with developer/appointed project management companies shall ensure that the end-use of funds is only to complete the project," says a government statement.
Finance Minister Nirmala Sitharaman on Wednesday said the Alternative Investment Fund (AIF), which was first announced by Sitharaman on September 14, would comprise Rs 10,000 crore worth of funds from the Centre and the remaining funds will be provided LIC and SBI.
The minister also said several sovereign funds had shown interest and might join the scheme at a later stage. Meanwhile, as per Anarock data, a total of 5.76 lakh units (launched in 2013 or before) across budget segments are stuck in various stages of non-completion in the top 7 cities alone. Multiple reports suggest that over Rs 55,000-Rs 80,000 crore worth of funds are needed to complete the stalled 1,600 real estate projects in the country.
Edited by Manoj Sharma