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Shuchi Singh | 17 Mar 2023

Delayed Housing Projects Will Now Be Funded By The Government

Delayed Housing Projects Will Now Be Funded By The Government

An opportunity to complete the stalled housing projects. The officials in the Finance Ministry reported that the funding would include only those housing projects that fall into affordable and mid-segment. Also, the projects that are non-NPA (Non-Performing Asset) and non-NCLT (National Company Law Tribunal) are considered by the government. 

This announcement has come as a significant boost because of the stalled projects which needed capital and completion. Lakhs of home buyers like you in the country can now breathe a sigh of relief. Following the announcement to fund, the government has instructed builders and other real estate professionals to identify projects within affordable and mid-segment that need support for the completion.

Finance Minister Nirmala Sitharaman all set to boost the real estate sector During her third press conference, Finance Minister Nirmala Sitharaman announced the support and funding to the stalled housing projects. She highlighted the government's intention to work on the slow growth of the economy and measures that can potentially help speed up the process.

After consulting with experts from various industries, she is ready to implement the measures designed to boost the performance of real estate as well as auto, NBFCs, and merger of public sector banks.

What experts are saying about this government’s move?

Pradeep Aggarwal, Co-Founder & Chairman, Signature Global, and Chairman - ASSOCHAM National Council on Real Estate, Housing, and Urban Development said, “The latest announcement of establishing a special window will go a long way in helping affordable and mid-income housing. The move will ensure that mid-income and affordable income projects that are 60 percent complete and are non-NPA and non-NCLT, will witness faster completion thereby benefiting the buyers. It will also help the government in achieving its objective of 'Housing for All by 2022'.”

He also added, “Announcements also indicate as government's effort of boosting the affordable housing as it had also announced in the budget an additional deduction of up to Rs 1.5 lakh for interest paid on home loans borrowed up to March 31, 2020, for purchase of house valued up to Rs 45 lakh. This is going to help increase the sale of affordable housing in tier II and tier III cities.”

Manoj Gaur, Managing Director, Gaurs Group & Chairman, Affordable Housing Committee, CREDAI (Confederation of Real Estate Developers Association of India) welcomed the government’s initiative and said, “Several mid-income and affordable housing projects which are witnessing slow progress due to lack of funds, will be expedited as a result of setting up of special window having a corpus of Rs 10,000 crore. It should help faster delivery of close to 3-3.5 dwelling units. The fact that the special window will be managed and monitored by professionals from the housing and banking sector is another step in the right direction.”

Although the government has paved the way in favor of the homebuyers, a section of the real estate sector feels that the amount announced cannot cover the whole stalled projects. At present, over 5.5 lakh units are stuck in 7 major Indian cities. If added other smaller cities and towns, the incomplete number of projects would go higher, and the government would require to increase its funding budget to fulfil the aim completely.

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