I want to assure homebuyers, says Nirmala Sitharaman on govt’s real estate push

Union finance minister on Saturday assured homebuyers whose houses are stuck in stalled projects that the government understands their problems and is pulling out all the stops to solve them. “I want to assure homebuyers, who have been left in the lurch for a very long time, who have taken EMIs, borrowed from the banks, who are also paying rents. We understand your problems and you are getting the results for your long-pending demands,” she said at the 17th Hindustan Times leadership Summit. “Even as we announced the last-mile connectivity money to be given by an alternative investment mechanism that we brought in, there were more than 150 projects which approached. They have all been vetted for what they are, for how much they would need, they have all been vetted to make sure that RERA compliance and everything else is in right place” she said. On November 6, Sitharaman had announced a plan to set up a Rs 25,000 crore alternative investment fund (AIF) to revive 1,600 housing projects and 458,000 housing units that are stalled to provide relief to distressed homebuyers and boost sentiments in the ailing realty sector. While the government will invest Rs 10,000 crore in the fund, the remaining Rs15,000 crore will come in from State Bank of India, Life Insurance Corporation of India and other institutions. “By December 15, which is ‘T plus 40th day’, T is the time that I announced, money will go to escrow account towards completing these projects,” she said on Saturday. Around 200,000 of the stalled housing units are in the National Capital Region (NCR) alone, around 100,000 in Mumbai and the rest in smaller cities, according to analyst estimates. By February she hopes that the process of channeling funds to distressed housing projects will be comprehensive. “We start with 5, we start with 10 and then we go on. Hopefully, by February and this is not just Delhi and Mumbai we have got list from Hyderabad, Bengaluru, Guwahati and Patna, so all over the country list of incomplete projects are coming,” Sitharaman said. Property developers have been struggling with dwindling sales, piling inventory and falling prices, even as funding for projects has dried up, with banks reluctant to lend to real estate projects fearing defaults. The prospects of the industry have turned worse since demonetization in November 2016 and the implementation of the goods and services tax in July the following year. Source: Hindustan Times