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Contribution of Rs 10,000 crore will be sufficient to help Stuck Projects

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Government’s announcement has encouraged the real estate sector, which is the second largest contributor to our GDP and has been creating millions of job opportunities across the country. 

While the sector has been working wholeheartedly towards implementing Prime Minister’s dream of ‘Affordable housing for everyone by 2022’; it would have been difficult for the industry to meet the challenges if recent government reforms were not announced. 

Government is understanding the challenges the sector is facing and how it affecting builders, developers as well as existing and potential consumers. 

The special fund set under category 2 of Alternate Investment Fund will create a ripple effect in the housing sector, especially in Tier 2 and Tier 3 cities along with the metros. The relaxation of ECB (External Commercial Borrowings) guidelines for affordable housing will also boost the sector by far. Contribution of Rs 10,000 crore will be sufficient to help large number of stuck projects. This step will also help smaller developers meet their commitments. We hope that this move will lead to more investments and more new projects will be launched across the  country.

This is a major initiative during the festive season, if the implementation is undertaken before the season ends; it is great news for buyers who want to move into their own properties. The special window to provide last mile funding for housing projects which are non-NPA and non-NCLT projects and for projects which are 60% complete will help fast track the work on unfinished projects. 

Government should also look at announcing some more initiatives, especially for the projects stuck under NCLT and NPAs. Buyers are stuck due to these projects for ages. The implementation of reforms will take place in a seamless manner if distribution of funds are done on an impartial basis and strict monitoring process are followed for these projects.

The measures will play an instrumental role in boosting the confidence of investors and developers both in the short and long run.

Authored Article by: Honeyy Katiyal, Founder- Investors Clinic

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