Our country has witnessed the development of housing projects at a faster rate in the last few years. However, the occurrence of stalled housing projects was increasing at an alarming rate. To change this picture and encourage to the homebuyers, Government of India has made an exciting announcement in the first week of November 2019. They have approved an alternative investment fund (AIF) of Rs. 25,000 crore to revive the stalled residential projects.
The stalled housing project is one of the biggest fears of home-buyers. Although the government has introduced the Real Estate Regulation and Development Act (RERA) to ensure the timely deliveries of the projects, it was not enough to change the situation. The primary reason for this situation was the lack of funds. Many project developers have to halt the construction of housing projects due to shortage of funds. As a result, homebuyers were suffering due to not having access to their houses.
By making this announcement, the Indian Government has given good news to such people. This news has brought relief to the home buyers who were stressed due to halted construction of their houses. Out of this Rs. 25,000 crore, the Indian government will be providing Rs, 10,000 core whereas State Bank of India, Life Insurance Corporation of India will be providing remaining Rs. 15,000.
These funds will exclusively be used to restart the construction of stalled projects. In order to avail this benefit, the project needs to register in RERA and their net worth should be positive. Following are the projects that will be benefited from these funds,
- 1 crore in other parts of the nation
- 1.5 crore in main metro cities including the national capital region (NCR)
- 2 crores per unit in Mumbai
Buying a house is a huge financial decision for the majority of the Indians. Many of them take the help of housing loans in order to purchase the house of their dream. Their journey does not just end after getting a home loan, but it starts. Every home loan borrowers need to pay EMIs from their monthly income. It is indeed unpleasant to hear that the construction of their house has been stalled during this time.
Not just, home loan borrowers, but even property developers were also struggling to deal with decreasing sales, falling prices and halted construction. Even financial organizations were reluctant to provide financial support to them.
At this time, this announcement made by the Government of India has brought relief to both of them, the homebuyers as well as the property developers.