New Delhi | Jagran Business Desk: Finance Minister Nirmala Sitharaman on Wednesday announced that the government will infuse Rs 10,000 crores into the real estate market to revive stalled housing projects across the nation while another Rs 15,000 crores will be contributed by LIC and SBI.
Addressing a press conference in New Delhi on Wednesday, the Finance Minister said that the government had been planning the move for the past two months as it held several meetings with the banks and the RBI.
"Cabinet approves establishment of 'Special Window' to provide priority debt financing for completion of stalled housing projects in the affordable and middle-income housing sector," said Sitharaman at the press conference.
"For purposes of funds to be set up, government shall act as sponsor and total funds committed by the government would be upto Rs 10,000 crores. Funds will be set up as Category-II Alternate Investment (AIFs) Fund registered with Securities and Exchange Board of India (SEBI)," she further said.
"We've come up with a special window that will be structured as an Alternative Investment Fund which will pool all these investments. Government will infuse Rs 10,000 crore Government, Life Insurance Corporation and State Bank of India will infuse Rs 25,000 crore," she added.
The government's move is to generate employment and revive the demand of cement. iron and steel industries. The move is also aimed at relieving stress in the major sectors of the economy.
The Finance Minister also said that the fund size would increase as sovereign and pension fund are expected to participate in this AIF. The AIF can be utilised even by the projects which have been declared non-performing assets or are facing insolvency proceedings.
Earlier on tuesday, the Finance Minister had said that government and Reserve Bank of India (RBI) are in the process of resolving the issues faced by the real estate sector.
The government has taken various steps to revive the market and consumption demand, said Sitharaman adding that the it had cut corporate tax rate to 22 per cent, which involved an outgo of Rs 1.45 lakh crore.
The 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 which was aggravated by the economic slowdown, which caused huge inventory pile-up due to lack of demand and also brought ongoing projects to a standstill due to lack of funds.
(with agency inputs)
Posted By: Aalok Sensharma