With an aim to complete stalled housing projects in the country, the government has approved forming a special window which is to be structured as an alternative investment fund (AIF). Union Finance Minister Nirmala Sitharaman said the government has approved setting up of a Rs 25,000 crore bailout fund to finance 1,600 stalled housing projects as it looks to boost the economy by kick starting incomplete projects. The minister said the government will put in Rs 10,000 crore in this AIF, while SBI and LIC would provide Rs 15,000 crore, taking the total size to Rs 25,000 crore.
Sitharaman said the government will establish a special window to provide priority debt financing for completion of stalled housing projects in the affordable and middle-income housing sector. She mentioned 1,600 stalled housing projects with 4.58 lakh homes will benefit from the alternate funding mechanism. This investment will be used to complete housing units worth less than Rs 2 crore in Mumbai, Rs 1.5 crore in Delhi-NCR, Chennai, other metros, and Rs 1 crore in other cities.
The move is aimed at generating employment as well as reviving demand of cement, iron and steel industries. It is also aimed at relieving stress in the major sectors of the economy. Besides, she mentioned the fund size will increase as sovereign and pension fund are expected to participate in this AIF. The AIF can be utilised even by the projects which have been declared non-performing assets or are facing insolvency proceedings.