The government on Saturday announced a Rs 10,000 crore special window to provide last-mile funding for the completion of ongoing housing projects which are not NPAs or facing bankruptcy proceedings under NCLT.
Announcing the measure, finance minister Nirmala Sitharaman said the government will contribute Rs 10,000 crore for the special window and roughly the same amount is expected from outside investors. This window will help in the completion of affordable and middle-income housing projects. The fund will be managed by professionals, the minister added.
Samir Jasuja, founder and chief executive officer, PropEquity said, "The measures announced today will probably be able to solve only less than 5 percent of the problem. It is not covering companies that are going into NCLT and that is a really large number and that is where the biggest problem lies."
"Our problem on the ground is that the situation is pretty grave. More and more companies especially developers are being taken to NCLT on almost a daily basis, I hear the number is already 500. NBFCs do not have the money anymore to provide funding to these developers to complete their projects which were also committed by the NBFCs. So, if they have given 30 percent of the funds and if another 60 percent was committed by them to complete those projects, those projects are also not going to see the light of the day," Jasuja said.
Abhishek Dubey, Jaypee home buyer and lawyer said, "The measures have not addressed the three big projects namely Jaypee, Amrapali and Unitech. There are too many conditions. One is that this scheme is only for non-NPA and non-NCLT. Then it has to be affordable and middle-income groups and the project has to be net worth positive, so there are so many conditions attached that they have not addressed these three projects. If these three projects are solved, it will solve problems of at least 1-1.5 lakh dwelling units. So, if the government would have created a separate thing for these three projects, that would have helped achieve this objective."
Abhay Upadhyay, president of Forum for Peoples' Collective Efforts (FPCE), said, "Government is taking concrete steps to take the entire real estate sector legacy issues out of this mess and we welcome that. Rs 20,000 crore is a huge amount and as the government has said, they are targeting some 3.5 lakh home buyers. Minister also mentioned that there is an inter-ministerial group who is looking into all these big projects, so the government has indicated that there is a separate discussion going on with regards to this. So, I expect something should come out on that. The good part is that the government has also said that there will be a professional person who will be dealing with the fund."
Keki Mistry, vice chairman and chief executive officer of HDFC said, "It is definitely a step in the right direction. We know that there are a huge number of projects which are stuck because of lack of last-mile funding. If there is a professional fund which is operated by professionals, which can invest in these kinds of projects, I think it can go a long way into resolving the real estate issue."