||Govt Forms 25000cr Fund to Revive Stalled Housing Projects
- The Centre has announced aRs 25,000 crore stimulus package for the ailing real estate sector.
- The Centre will infuse Rs 10,000 crores into the real estate market.
- SBI and LIC, the sovereign and pension funds have also agreed to invest in the market.
- Government plans to revive over 1600 stalled housing projects covering 4.58 lakh units.
- If the developer has not declared liquidation, they can avail the cover.
Here’s what the industry had to say:
Bijay Agarwal, Managing Director, SalarpuriaSattva group, “This is a welcoming move by the cabinet and the fund will help provide relief to more than 4.5 lakh home buyers. This step proposes to bail out many housing projects and revive hope for the home buyers. The extension of fund to mid-income projects is reassuring step forward. Faster implementation of the funds will only enhance the sector further.”
Rohit Poddar, Managing Director, Poddar Housing and Development Ltd and Joint Secretary, NAREDCO Maharashtra,“This stimulus package has been announced majorly for the NPA projects under RERA. The funds will bankroll the stalled projects in the affordable and mid-income housing segment and keep the needle moving in the micro markets. It will also revive the demand for construction materials and assuage the stress in other major sectors in the economy.”
Sanjay Dutt, MD & CEO, Tata Realty and Infrastructure Limited, “The real estate sector is one of the largest contributors to the Indian GDP and the growth of this sector heavily relies on conducive Government polices, we are pleased to see the Government and Reserve Bank are working together to address the challenges plaguing the industry. This is a much-required boost to bring the real estate sector back on its feet and alleviate the concerns of homebuyers that were facing the burden of unfinished projects. However, the deployment time of this initiative holds the key to its success.”
Sankey Prasad, Chairman & Managing Director, Colliers International India,“This is definitely the need of the hour, especially to bring back the confidence of both developers and end buyers in the residential segment. Government should consider increasing the AIF (Alternate Investment Fund) allocation to also cover few critical infrastructure projects which require immediate intervention. We see the impact of this to the banking level, as the NPA’s reduce leading to faster revival of the ecosystem”.
Manju Yagnik, Vice Chairperson Nahar Group and Vice President NAREDCO, Maharashtra, “Cabinet's approval for funding of stalled Affordable and Middle-Income housing projects will enable home-buyers to get delivery of homes locked in stalled housing projects. This will also restore trust between buyers and developers and boost the sentiments of the housing sector. Besides, revival of the sector will also lead to demand of Cement, Iron & Steel Industries giving further impetus to generate more employment.”
Kiran John, Joint Managing Director, Terapact, “This will create a new avenue of relief and will help restore some buyer confidence. Most of the benefit will be felt in Mumbai and NCR. One question still unanswered is whether the programme will be expanded to include a wider range of eligible projects, as the current definition does limit the inclusion of a vast number of projects that could benefit.”
Koshy Varghese, MD, Value Designbuild Pvt Ltd.,“The fact that the Union Cabinet is trying to reach out to the ailing realty sector is heartening. However, if we take into consideration the value of loans and bad debts, the amount approved by the Union Cabinet is miniscule. Taking into account that 90% of the total debt is currently owed by only 10% of the developers, mainly the larger ones the question remains as to how the Government will ensure that the intended financial boost trickles down smaller developers? Additionally there is no stipulated deadlines. It would have been a much better option for the FM to provide incentives to the public to purchase housing units. Furthermore, the Government must seriously consider giving the real estate sector the much needed industry status.”
Anandeep K Chadha, Chief Financial Officer, Assetz Property Group,“This will be a good initiative taken in the interest of the home buyers and it will help resolve the financial stress faced by them. There would be a considerable release of funds in the sector which is gasping for liquidity to complete projects.”
AvneeshSood, Director Eros Group,, “We welcome the Government initiative to provide a structured method of infusing liquidity into stuck projects, and thereby seek to address the key issues of project funding, completion and delivery. The fund is expected not only to support the real estate sector but also generate commercial return for its investors.”
Sunil Mishra, CEO, Trespect,,“The Government’s move to allocate Rs 25,000 Cr to stuck residential projects is no doubt, a very welcome move for the real estate industry, and for the larger economy too, with collateral benefits spilling over to steel, cement, paints, and of course, to the larger employment levels too. As these 450,000 buyers move into their apartments, there will also be a good demand for movers & packers, interior design and furnishing sectors. The implementation of this investment would take anything from 6 to 24 months, and hence this is not an overnight steroid.”
M Murali, CMD, Shriram Properties Ltd, “The infusion of funds for affordable and mid segment projects will positively impact the normal home buyers. I am certain that this coupled with other measures such as the support extended to NBFCs will serve as a stimulus to help the economy get back on track and aid an additional 1.5 to 2 percent growth. It is great to see that projects declared NPA or those not declared liquidation-worthy by NCLT will also benefit from this initiative. I feel that AIF will immediately benefit around 50,000 units.”
K.T. Jithendran, CEO, Birla Estates,“As this special window is targeted to help the stalled housing projects in the mid and affordable segments, it will majorly benefit small/ mid-level builders than the real estate giants. The release of substantial amount of funds in these stuck and stalled projects is going to boost many related industries such as Iron, Steel, Cement etc., as well. This coupled with the earlier measures announced will help contribute towards a positive growth and reinstate the confidence in the economy.”