Govt sets up 25,000 cr AIF to revive the struggling realty sector in India
New Delhi/UNI/IBNS: The Union Cabinet on Wednesday approved setting up of a fund in which the government would infuse up to Rs 10,000 crore while Life Insurance Corporation(LIC) and State Bank of India would jointly contribute Rs 15,000 crore to help revive the struggling realty sector, informed Union Finance Minister Nirmala Sitharaman.
Announcing this after a Union Cabinet meeting here, Finance Minister Nirmala Sitharaman said the Union Government approved setting up of a 'Special Window' to provide priority debt financing for completion of stalled housing projects in the affordable and middle-income housing sector.
The Fund will provide relief to developers with unfinished projects and ensure delivery of homes to buyers. As many as 1600 stalled housing projects with 4.50 lakh homes across the country are expected to be completed with the help of the fund.
"An AIF (asset investment fund ) will be created. The government will put in Rs 10,000 crore and others, such as SBI and LIC, will create funds of Rs 25,000 crore in all," she told a press briefing after a meeting of the Union Cabinet.
The fund will be managed by SBI Caps, she said.
"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," she added.
The Finance Minister said the move will end the slowdown in cement, iron and steel industries and put the other major sectors of the economy back on track.
The fund size is expected to increase as sovereign and pension funds are expected to join this AIF. Projects which have been declared non-performing assets by the lenders or facing insolvency proceedings at the NCLT can also utilise the AIF, she said.
Middle-class home-buyers are expected to benefit from the government's move as the stalled projects are likely to be completed with the infusion of funds, the minister said and added that the large amount of money stuck in these projects will come into circulation for productive use in the economy.
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