In a much-awaited relief for distressed homebuyers, the government on Wednesday approved Rs 25,000-crore special window for stalled real estate projects. Real estate experts welcomed the move saying, it would solve the long-pending problem of homebuyers. On Wednesday, Finance Minister Nirmala Sitharaman said the government will put in Rs 10,000 crore in an Alternative Investment Fund (AIF) and the remaining amount will be provided jointly by State Bank of India (SBI) and Life Insurance Corporation (LIC). The government's nod to the first AIF under the special window comes at a time when the country's real estate developers are finding it difficult to raise funds after the default by the IL&FS group that triggered a liquidity crisis in the economy.
Here's what experts said on government's Rs 25,000 crore realty push:
Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani:
"The government's move to create a Rs 25,000-crore fund to help complete stalled housing projects is a welcome move which will provide relief to homebuyers as well as developers and boost housing demand. The decision will be a big relief not only for consumers whose delivery is stalled but also for the builders who were keen to raise funds to complete their projects but unfortunately couldn't complete them because of lack of funds."
"Going forward, this step will definitely drive growth by steering consumption in real estate and associated sectors and will help generate considerable employment."
Kiran John, Joint Managing Director, Terapact:
"This will create a new avenue of relief and will help restore some buyer confidence. Most of the benefit will be felt in Mumbai and NCR. Overall buyer sentiment will improve knowing that the government is rolling out a concrete plan to boost the sector and a consolidated effort has already been put into motion."
Anuj Puri, Chairman - ANAROCK Property Consultants:
"To be used for last-mile funding of stuck affordable and mid segment projects, this is a critically important move which eliminates the ambiguity which surrounded the timelines for setting up the fund, and its actual implementation. Finally, countless aggrieved homebuyers will see the light at the end of the tunnel."
"This move couldn't have come at a better time because the delay was causing serious apprehensions. The delay in the on-ground deployment of the stress fund gave rise to severe apprehensions about the main issues - that of stuck and delayed projects - that had remained unaddressed so far."
Jaxay Shah, Chairman, CREDAI:
"We are certain that a majority of stuck homebuyers will benefit from the announcement of Rs 25,000 crore stress fund which is going to be increased in value if needed. Quick deployment of money and efficient decision making for qualification of projects will solve the long pending problems of homebuyers."
Siddhartha Mohanty, MD & CEO of LIC Housing Finance:
"The government's move to allocate Rs 25,000 crore to stuck residential projects is a masterstroke to address home buyers issues relating to project deliveries and stressed developers funding issues that were stalling the completion of projects. Real estate sector which witnessed challenges in recent times will get major boost through this special window. This relief package will definitely ease the situation. Also this move will benefit lakhs of homebuyers. It's a big positive for developers and real estate sector."
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