The Union Cabinet has approved the creation of an Alternative Investment Fund (AIF) of Rs. 25,000 crores to provide last-mile funding for stalled affordable and middle-income housing projects across the country, Finance Minister Nirmala Sitharaman announced.
Which projects will be eligible?
The Minister had announced the proposal to create this fund in mid-September, which the Cabinet has now approved. All affordable and middle-income housing projects which are registered with the Real Estate Regulatory Authority (RERA) will be eligible.
What are the details of fund?
The fund size will initially be Rs. 25,000 crore with the government providing Rs. 10,000 crore and the State Bank of India and the Life Insurance Corporation providing the balance. The fund is not capped at Rs. 25,000 crore and will likely grow in future.
The funds will be set up as Category-II Alternative Investment Fund registered with the Securities and Exchange Board of India and will be managed by SBICAP Ventures Limited.
The AIF is expected to pool investments from other government-related and private investors, including public financial institutions, sovereign wealth funds, public and private banks, domestic pension and provident funds, global pension funds and other institutional investors.
According to the government’s estimates, there are more than 1,600 housing projects in which 4.58 lakh crore units are stalled.
NPA projects are also eligible
The Cabinet decision amends the original announcement by allowing housing projects that have been classified as non-performing assets (NPA) and that are under National Company Law Tribunal (NCLT) proceedings also to be eligible for financing.
“Earlier, when I had made the announcement, we had decided that the fund would be used for non-NPA and non-NCLT projects,” Ms Sitharaman said. “Now we have withdrawn the non-NPA and non-NCLT provision. If the project has not been declared liquidation-worthy, it is eligible to be covered under this scheme.”
Source: The Hindu
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