Govt. has announced last mile funding of 10,000 crore for real estate sector targeting stuck housing project which are out of NCLT and NPA.
It is good news for home buyers who are suffering due to delayed projects since Govt. is all set to infuse last mile funding for stuck housing projects across India.
Like any other industry, real estate sector is also facing economic slowdown. The biggest reason behind this is shortage of funds at developers and sector was demanding last mile funding to scale up stuck projects. Finally Govt. has release dedicated funds, Rs. 10,000 crore to the sector.
Scarcity of fund was reason of stuck housing project in India. Real estate sector was demanding last mile funding to finish incomplete housing projects and now govt. is keen to create Alternative Investment Fund (AIF). But various things need clarity like; selection of project, allocation of fund, construction timeline and monitoring etc. – Suresh Garg, CMD- Nirala World.
But at the same time Govt. has put a strong condition. The housing projects should be non NCLT (National Company Law Tribunal) and non NPA (Non Performing Assets). Now this is a big condition for home buyers since most of the housing projects are facing legal procedures either due to banks or contractors or home buyers.
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The economic booster of Rs. 20,000 cr for housing is a welcome step. It will help those developers who are genuinely struggling to finish project but may not serve true purpose to address maximum home buyers. Because maximum housing projects may not fulfill said condition of non NPA. Creditors are fighting from all corners to secure their investment even after 70-90% of project completion. Govt. should be flexible to cover maximum project to save investors of affordable and mid level. – Dinesh Jain, MD- Exotica Housing.
Additional 10,000 crore will be infused via financial institutions to ensure fresh flow of funds for worthy housing projects. This is huge financial boost to housing sector and must cater issue of last mile funding. In fact govt. will soon clear more factors related to the corpus.
Apart from this, definition of projects under the scheme is restricting whole lot of projects. After delay in construction, a housing project is facing case trail of one or the other tribunal. New IBC (Insolvency and Bankruptcy Code) is more wide and open than the condition of this scheme. Hence govt. must re-think on the terms in order to provide relief to maximum stalled housing projects, added Mr Garg.
It is positive sign for many developers who were unable to finish project in lack of funds. Hopefully home buyers will get relief in coming months and get their units.