Thousands of homebuyers were clueless about the funding of the projects. They would now get instant relief as the government is coming up with an idea to set up separate stressed fund to complete abandoned projects.
The Finance Ministry is planning to set up a separate stressed fund to provide immediate liquidity boost for thousands of dwelling units stuck in litigations and could not be completed due to cash crunch.
The Supreme Court, last month, had handed over the task of completing Amrapali projects to state-run National Buildings Construction Corporation Limited. However, thousands of homebuyers were clueless about the funding of the projects. They would now get instant relief as the government is coming up with an idea to set up separate stressed fund to the tune of Rs 10,000 crore to complete projects, which were abandoned earlier.
The idea was mooted by both homebuyers as well as developers who separately met Finance Minister Nirmala Sitharaman recently to discuss the problems of the sector. “The Finance Ministry is considering to set up separate stress fund. There would be a separate high level meeting, under the chairmanship of the cabinet secretary, in the next few weeks to discuss setting up the fund,” a highly placed source from the Finance Ministry told this publication post meeting.
While the exact amount and timeline of providing the fund has not been decided yet, all the stakeholders have suggested to set fund to the tune of Rs 10,000 crore. According to real estate data analytics platform PropEquity, around 4.4 lakh housing units across India worth Rs 3.1 lakh crore face construction delays, spread across 1,443 projects in top seven cities - Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), Delhi-NCR and Pune.
Of the stalled projects, nearly 1.9 lakh units valued at Rs 1.3 lakh crore are located in NCR alone, MMR has 97,686 units worth almost Rs 1.01 lakh crore pending, and end-user driven market Bengaluru has as many as 32,464 units worth Rs 0.22 lakh crore facing delays, the report said.Homebuyers body Forum for Peoples’ Collective Efforts President Abhay Upadhyay said they have demanded a creation of a Rs 10,000 crore stress fund to complete such projects and provide relief to homebuyers. Similar demands were placed by other homebuyers’ forum too.
The demand is not new. This was a pending demand from the Confederation of Real Estate Developers’ Associations of India (CREDAI) and NAREDCO, two major realtors’ association.“The only other way out for the homebuyers woe is creation of a separate “stressed assets fund” for unfinished housing projects which are stuck due to lack of fund,” CREDAI had said earlier.
The Ministry of Housing and Urban Affairs (MoHUA) has also endorsed the idea of creating separate stressed fund, sources said. “Whatever problems are there for homebuyers, stalled projects etc., we are exploring ways to move forward,” Hardeep Singh Puri, minister MoHUA told reporters after the meeting.
Meanwhile, in case of NCR, so far there are 42,000 unfinished units spread across 16 Amrapali projects. According to the NBCC, they will cost about Rs 7,714.71 crore. There are 27 stuck projects of Jaypee and will cost Rs 6,500 crore.
Delays spread across 1,443 projects
Around 4.4 lakh housing units across India worth Rs 3.1 lakh crore face construction delays, spread across 1,443 projects in top seven cities that is Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), Delhi-NCR and Pune