Government announces Rs 25,000 crore package for real estate

The real estate sector has been grappling with liquidity issues, stalled projects and low housing demand. Many builders have failed to deliver homes to buyers. The government has announced the setting up of Rs 25,000 crore alternative investment fund (AIF) as a relief measure for real estate developers. 

SBICAP ventures would manage the AIF. The government has allocated Rs 10,000 crore towards the fund. Life Insurance Corporation, State Bank of India and sovereign funds would also subscribe to the fund. 

Analysts expect the relief package to solve the problem of non-performing assets (NPAs) for finance companies and clearing up real estate inventories. The fund could also revive economic activity in one of the core sectors of the economy. The package is positive for the real estate sector reeling under financial stress.

Also Read: The Transition of Investors from Real Estate to Mutual Funds

As per the government estimates, there are over 1,600 stalled real estate projects and around 4.58 lakh unsold real estate units. The government seeks to include RERA-registered net worth-positive projects which are nearing completion. The package would ease cash flows for the developers and facilitate repayment of dues to real estate finance companies.

The cabinet also approved for establishing a ‘Special Window’ to provide priority debt financing to facilitate completion of stalled housing projects in the affordable and middle-class housing sector. The decision would help relieve financial stress for middle-income buyers. 

For any clarifications/feedback on the topic, please contact the writer at sweta.dugar@cleartax.in

You May Also Like

Taxation of dividend income received on or after 1 April 2020 (FY 2020-21)

You may receive a dividend from your equity or mutual fund investments.…
GSTR-9

CBIC has notified an extension of two months to various GST compliance

The government of India has notified yet another extension for the completion…
Gold Jewellery

24K Gold Rate in India for November 2019: Week 4

The fourth week began with the gold rate in India holding at…

Due date to file annual GSTR-4 for FY 2019-20 gets further extended

The government has further pushed the deadline to file the brand new…