Govt Forms 25000cr Fund to Revive Stalled Housing Projects
By Anuj Kapoor, Founder – Stratcap Corporate Advisors LLP
Government of India, on Wednesday, approved the creation of a ‘professionally managed’ INR 25,000 Crore Alternative Investment Fund (AIF), aimed at reviving stalled Housing projects in the country. This follows the initial announcement made by the Government in mid-September, of the creation of a fund with a corpus of INR 10,000 Crore, which anyway would have been insufficient to address the core issue.
The recent proposal of an AIF with an increased corpus of INR 25,000 Crore along with parameters defining eligibility of projects, demonstrates that the government is listening to and accommodating feedback from all stakeholders, including real estate developers and financial institutions.
This initiative has the potential to provide a much-needed boost to the Indian residential sector, especially in cities like NCR and Mumbai. But the success of this initiative and, consequently, the achievement of its desired outcome, depends mostly on how effectively and promptly it is executed. If executed expeditiously, this move can provide much-needed relief to developers as well as homebuyers.
I believe that, as with any other government initiative, the desired economic effect of this calculated move is directly dependent on how quickly the process of creating an AIF and prioritizing and selecting stalled housing projects, is carried out. How the concerned institutions address issues such as regulatory implications on Projects/Companies already under NCLT and complexity of proposals plagued with ongoing consumer cases, will also have an impact on the success of the proposed initiative.