New Delhi, Nov 6: In a bid to boost the realty sector, the Union Cabinet on Wednesday gave the go ahead for setting up of a Rs 10,000 crore 'Special Window' fund to provide priority debt financing for the completion of stalled housing projects in the affordable and middle-income housing sector.
Briefing newspersons after the Union Cabinet meeting, Finance Minister Nirmala Sitharaman said the government shall act as the sponsor and the total commitment to be infused by the Government would be up to Rs 10,000 crore. The Union Cabinet, chaired by Prime Minister Narendra Modi, set up the fund as a Category-11 AIF (Alternate Investment Fund) debt fund registered with SEBI and which would be professionally run.
For the first AIF under the Special Window, it is proposed that SBICAP Ventures Limited shall be engaged to be the Investment Manager. This fund would in turn provide relief to developers that require funding to complete a set of unfinished projects and consequently ensure delivery of homes to the home-buyers.
Since the real estate industry is intrinsically linked with several other industries, growth in this sector will have a positive effect in releasing stress in other major sectors of the Indian economy as well.
The move comes after Ms Sitharaman announced on September 14 that a special window for affordable and middle-income housing will be created. This special window will provide last mile funding for housing projects which are stressed.
Subsequently, Inter-ministerial consultations and several stakeholder consultations were held with the housing industry including Housing Finance Companies, Banks, NBFCs, Investors, and Real Estate Developers. Problems being faced by home buyers, developers, lenders, and investors were ascertained that could be addressed through the Special Window. (UNI)