In what could be a major relief for lakhs of homebuyers across the country, the central government is exploring the possibility of creating a stress fund worth Rs. 10,000 crore. The objective is to ensure immediate supply of capital for the real estate sector that is struggling to complete its multiple projects due to a variety of reasons, including a liquidity crunch within the real estate firms.
Earlier this week, the real industry met with Finance Minister Nirmala Sitharaman. In a two-hour-long meeting, the industry and finmin deliberated on multiple issues, including funding the stalled projects.
The meeting was followed by separate discussions with various homebuyers association. Notably, the meeting was attended by Sitharaman, Minister of State for Finance Anurag Thakur, Housing and Urban Affairs Minister Hardeep Singh Puri, and top officials from the departments of economic affairs, revenue, housing, CBDT, corporate affairs, Rera, Credai and Naredco.
According to the Financial Express, industry highlighted issues like liquidity crunch and poor sales, which has created a "fragile situation". It demanded encouragement from the government to banks and NBFCs to fund real estate projects. Moreover, the industry also requested for inclusion of financial institutions under the purview of Real Estate Regulatory Act (Rera) to aid completion of incomplete projects.
One of the sources privy to the development said, "During the deliberations, it was decided that a group will be formed under Puri to explore the feasibility of creating a stress fund to complete pending projects. It will include cabinet secretary, housing and urban affairs secretary, corporate affairs secretary and the Rera chief. The group is expected to meet in the next two-three weeks."
"Whatever problems are there of homebuyers, stalled projects etc, we are exploring ways to move forward. Many homebuyers have moved the Supreme Court and there are judgments too. So, it's a very complicated arena. But given the goodwill within the government, among homebuyers and the industry, whatever problems are there, we will find solutions for them,'' said Housing and Urban Affairs Minister Hardeep Singh Puri.
Citing huge delays in delivery of residential units, Homebuyers' body Forum for Peoples' Collective Efforts president Abhay Upadhyay said that around five lakh buyers are yet to get their homes.
Suggesting some of the solutions to address the issue, the industry association recommended steps, including reduction of interest rates on home loans to 7 percent and withdrawal of the recent NHB circular prohibiting subvention scheme. The association also requested for National Infrastructure Investment Fund (NIIF) funding the stalled projects.