Govt’s Economic boost of Rs. 10,000 cr to stressed housing projects will help home buyers of incomplete projects but is it enough for sector!
FM N Sitharaman announced a special window of Rs. 10,000 cr funding to stressed housing projects in non NPA and non NCLT category. Apart from Govt., same amount will be generated from outsider funds. This is going to rescue nearly 3.5 lakh stressed units across the country but accessing the present scenario will this help to all home buyers.
But a big question is still looming, whether this fund will be enough for all stuck home buyers! Of course not because as per data of Anarock, 1.74 lakh units are stressed in top 7 cities in which no construction work is going on. Out of which 1.18 lakh units spread over 67 housing projects belong to NCR region. In this way, Rs. 10,000 crore may help very limited no of housing projects and if govt. want to help all stuck home buyers then govt. must get ready to push more blocks of same size periodically.
- Stress funds are only hope of incomplete housing projects.
- Last mile funding for stuck housing projects.
“It is good to hear that Govt is positive towards allocating funds for housing sector and incomplete projects. There are many housing projects in NCR which are non NPA and non NCLT where developers are willing to finish but facing acute lack of funds. Right now neither banks are providing fund nor home buyers are willing to pay due to trust factor.” – Hari Om Dixit- MD, Gayatri Group.
The Govt. is clear in the objective to rescue home buyers of incomplete project but on the same not ready to intervene for those which are part of legal procedures like; NPA and NCLT. Also the funds will be managed by professionals of housing and banking sector to execute and monitor.
Worst part is that most of the housing projects are either facing insolvency or in category of non-performing assets. After leaving these projects, very few housing projects will be left over.
According to Iftikhar Ahmed MD Nirala India, “Although the 20000 crore fund will help the sector it will not help the projects under NPA or under NCLT. We feel the funds are still low even if the project under NCLT and NPA are removed. Also the 3 month cycle for NPA should be increased so that more and more projects should be able to take benefits of this funding.”
Offering funds to stressed housing projects is good step but leaving NPA and NCLT will not solve true objective behind the step. Just because of lack of funds housing projects are facing insolvency or non-performing. Hence govt. should think of focusing these two categories as well to ensure units of these projects too.
It will help such honest developers to get fresh flow of funds, resume construction and complete housing society. It could be a benchmark step from Govt to support affordable and mid segment housing category. It may help many projects to save from NCLT and NPA procedure in future. I am hopeful that real estate sector will get benefit from this economic booster, added Mr Dixit further.
View of IRW– This economic booster to stressed housing projects could be a step towards catering needs of NPA and NCLT projects too. Home buyers of these projects are facing indefinite delay and paying EMI and rent together. Also Govt. did not mention reason of leaving housing projects of NPA and NCLT. Home buyers will be hopeful to get a positive response from Govt. to cater requirements of these projects as well.