Nirmala Sitharaman Press Conference Live: NPA, NCLT-referred housing projects applicable for funding, says FM

Government approves creation of Rs 25,000 crore fund for realty sector

FM Nirmala Sitharaman said the government will put in Rs 10,000 crore in this alternative investment fund (AIF) while SBI and LIC would provide Rs 15,000 crore, taking the total size to Rs 25,000 crore.

“This will be a win-win for home buyers and real estate developers, as it will help alleviate financial stress faced by homebuyers who have invested their hard-earned money, while also releasing funds stuck in such delayed/ stalled projects for productive purposes,” said on the Cabinet announcements. “The fund will help nearly 1,600 stalled housing projects in the country, and it is positive that the aspect of NCLT/ NPA will not be a stumbling block to prevent stalled and delayed projects from approaching the fund. Positive impacts of the move include generation of employment, revival of demand for cement, iron and steel industries and relieve stress in other major sectors of the economy,” he added.

#EXPLAINED: Cabinet approves Special Window for funding of stalled affordable and middle-income housing projects. Govt to put Rs 10,000 crore in a Rs 25,000 crore realty fund or AIF: https://t.co/V53kz5mUae#RealEstate #Homebuyers pic.twitter.com/e9XkIR0cNh

— moneycontrol (@moneycontrolcom) November 6, 2019

"Developerpedigree, project portfolio, completion capability may be a big criteria for the disbursment of funds," said Samir Jasuja of Propequity.

"It may take 3-5 months for stuck realtyprojects to recieve funding,"said Samir Jasuja of Propequity.

"Most of these projects are more than 50 percent complete. If funding comes at day zero, it would take anywhere between one year to one-and-a-half year to reach completion," said Samir Jasuja of Propequity.

"I see around 60,000 units seeing immediate benefit from this scheme", said Samir Jasuja of Propequity.

"The genuine projects stuck due to cash flow issues, or non-funding will be benefitted,"says Satish Magar of CREDAI.

Samir Jasuja Propequity - We were hoping that the non-NCLT non-NPA criteria is dropped. With these two conditions modified, I feel that more than 800 projects will see the light of day soon. The AIF will immediately benefit roughly 40,000 to 60,000 units.

SBI Capital to manage #realestate fund initially. Fund will also help projects that are NPAs. AIF will fund incomplete projects where housing units valued at < Rs 2 cr in metros and < Rs 1 cr in non-metros: FM #NirmalaSitharaman

Track @NSitharaman LIVE:https://t.co/WepvJUz1Jl pic.twitter.com/nWoRNlRelh

— moneycontrol (@moneycontrolcom) November 6, 2019

Nirmala Sitharaman's booster dose for real estate sector: Key takeaways

Finance Minister Nirmala Sitharaman on November 6 announced another set of measures to boost the beleaguered real estate sector and infuse confidence among hassled homebuyers.

FM Sitharaman: SBI Cap will manage the real estate AIF initially through an escrow account. It will prioritise the projects as per viability and the funds for any project will be deposited into the escrow of that particularproject in a phased manner depending on the rate of completion of construction.