Government Tweaks Housing Rescue Fund To Include NPAs And Insolvent Projects

The Cabinet today approved an earlier announced scheme to provide funding relief to stalled housing projects across India, albeit with some tweaks.

Watch | Key highlights of the special fund for stalled realty projects.

Builders, Homebuyers Reactions

Builders and homebuyers welcomed the change in eligibility criteria as it now widens the scope of projects that will benefit.

Jaxay Shah, National Chairman of industry body Confederation of Real Estate Developers Association of India, said that with the change in eligibility majority of the stuck homebuyers will benefit. Besides, a larger corpus which can be further increased is also welcomed, he said.

This will bring in even more stalled projects into the eligibility criteria and give relief to more aggrieved homebuyers, agreed Anuj Puri, chairman of ANAROCK Property Consultants.

Abhay Upadhyay, President of the Forum For People’s Collective Efforts which represents homebuyers, said that the government now should also name the 1,600 stuck projects it has identified so that it will give customers more surety.

“The government should ensure that the money from the escrow account is not given directly to builders,” Upadhyay added.

This scheme does not address the real issues of homebuyers as well as developers, said Nayan Shah, president of industry body CREDAI-MCHI. The government should direct lenders to re-structure the existing loans of the developers, he said.

Approximately 35-40 percent of genuinely stuck projects with repayment potential will benefit from this fund, said Pankaj Kapoor, managing director of realty consultant Liases Foras.

“In my estimation the government will need Rs 70,000 crore to take care of all stuck projects,” he added.