SBI, LIC likely to extend support with Rs15,000 crore
NEW DELHI: With the Cabinet clearing plan to pump in Rs10,000 crore into an alternative investment fund (AIF), and State Bank of India (SBI) together with Life Insurance Corporation (LIC) expected to put in another Rs15,000 crore, the government aims to revive the stalled housing projects in the country.
The move would potentially help 4.58 lakh home buyers, which in turn could handhold the ailing real estate sector from the long-stretched slump.
Briefing reporters on the details of the government initiative designed to revive the ailing real estate sector that had a knock-on effect on the whole economy of the country, the Finance Minister Nirmala Sitharaman (seen in the picture) said the incomplete housing projects worth less than Rs2 crore per unit in Mumbai, Rs1.5 crore in metros including NCR and those valued below Rs1 crore in other parts of the country will benefit from the move as the newly instituted fund will be used for the completion of such projects.
But the funding will be available on the condition that the net worth of the project needs to be positive. “Even the projects that have been declared as an NPA or dragged to NCLT but not asked for liquidation, will also benefit from the new initiative,” she added.
According to an estimate, there are 1600 housing projects and 4.58 lakh housing units that remain stalled currently due to lack of funds.
Real estate projects worth Rs1.8 trillion are stalled across India, according to a professional estimate.
The focus on real estate is part of the government’s broader plan to kick-start economic growth, which has slowed to a six-year low of 5 per cent in the quarter ended June 30.
The market is of the view that the real estate industry has failed to recover from the twin shocks of the ban on high-value currency notes in November 2016 and the goods and services tax (GST) that was introduced in July the following year.
This has resulted in piling inventory, stagnant-to-falling property prices and scarcity of funding for developers to take the projects forward.