‘Stalled projects’ completion is stimulus’

Centre’s push to help fund stranded housing projects lends boost to realty, core sectors: Sitharaman

Finance Minister Nirmala Sitharaman on Thursday said the government’s efforts to help finish stranded housing projects would serve as a ‘sustained stimulus’ for the ailing real estate sector and drive demand in core sectors including cement and steel.

Speaking at the virtual handing over of apartments to 640 households following the completion of the first stalled residential project funded through the Special Window for Affordable & Mid-Income Housing (SWAMIH) in Mumbai, Ms. Sitharaman said that the project, completed over 18 months despite the COVID-19 pandemic, indicated ‘positivity’ for the realty sector.

“I remember, in 2019, the number of families that kept calling the Prime Minister and the representations that kept coming to us about the bank loans they had taken, the EMIs they had to pay,” the minister said. “2019 was a very testing time for us on this particular score, because the real estate industry was going through a stressed time, they were cash-strapped,” she added.

With banks not lending to the sector, many projects were left almost complete, translating into ‘a perpetual wait’ for families who had booked flats, she said.

“For a middle-class family, to have to pay rent and equally the EMI on loans taken for their homes, couldn’t have been worse than anything else. It was the biggest burden they were carrying after investing to have a happy home for themselves. It was a Catch 22 situation, you couldn’t go elsewhere to find a house, you couldn’t get your own house because it wasn’t completed,” Ms. Sitharaman pointed out.

Last mile funding

Stating the last-mile funding to push stalled real estate projects had given priority to middle class families, she said the cost of apartments helped under the scheme had been capped at ₹2 crore in Mumbai, ₹1.5 crore in the National Capital Region and 5 other cities, and ₹1 crore in the rest of the country.

“So this particular scheme has primarily and only focused on relieving the suffering of the middle class who invest in their homes by borrowing, and who, for no fault of theirs, suffer because houses are not given to them… because real estate itself went through a cash-strapped situation in 2019,” Ms. Sitharaman observed. “But today, we are seeing the light at the end of the tunnel,” she added.

Eventually, the SWAMIH investment fund-1, managed by SBICap Ventures, would benefit 1,16,000 Indian families awaiting their homes, the minister said.

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