When the concerns were raised on some hiccups in the economy, the government actively listened to the apprehensions from all the sectors and started addressing one by one. A series of measures have been announced by the government in the last couple of months. From MSME to automobile to corporate sector, many concerns were addressed with the proactive measures in the past. Now, with the steps announced on November 6, the real estate sector has got a major booster.
Booster to Real Estate Sector- Key Takeaways
- An Alternative Investment Fund with an initial corpus of Rs 25,000 crore called to revive up to 4.6 lakh housing units
- This spreads across 1,600 projects including those that have been classified by banks as non-performing assets or are facing insolvency resolution action.
- Any RERA (Real Estate Regulation Act) project that is net worth positive will be considered irrespective of the stage of completion
How This Move Helps
This move is expected to bring relief to a large number of middle-class and lower middle-class homebuyers who are under financial stress. It is positive for those who are in the real estate business as this will result in the release of large amount of funds stuck in these projects for productive use in economy. According to an analysis in Business Standard, this measure will cover almost 80% projects in some of the key property markets such as NCR and Mumbai.
These set of tweets by Principal Director General of Press Information Bureau may further help to understand the significance.
Special Window to provide last mile funding to projects meeting these criteria:
●Affordable & middle-income housing project
●On-going projects regd with RERA
●Reference by existing lender
●include stressed projects classified as NPA & NCLT
— K.S. Dhatwalia (@DG_PIB) November 6, 2019
One needs to put this recent measure alongside the series of measures in the last three months, it becomes evident that the government is very much open to the feedback of markets and all the stakeholders in the economy and constantly reviewing the economic situation to avert the shaping up of any major crisis in the economy.
Back in August this year FM Nirmala Sitharaman had announced a series of measures that were aimed to address the issue of easy funding to Start Ups, capitalisation of the economy and easing the process for common people. You may read more in our previous article Modi Government’s Booster Dose to the Economy.
After a week in the same month, a historic corporate tax rate cut was announced which aimed at helping domestic companies to further scale up their business. Consequently, this will also help in employment generation.
Now, the measures to boost the real estate sector has further assured people that the government will systematically address all the concerns in the economy one by one.