December 5, 2023: The government approved 342 proposals, totalling Rs 37,554 crore, until November 16 this year to complete stalled real estate projects in India, the Rajya Sabha was informed on December 4, 2023. This initiative, executed through the Special Window for Completion of Affordable and Mid-Income Housing (SWAMIH) investment fund will benefit 2,18,699 homebuyers and unlock projects worth Rs 94,367 crore, as per a PTI report.
The SWAMIH fund, was established by the government to give relief to those impacted by delayed projects, specifically targets financially viable ventures registered under the Real Estate (Regulation and Development) Act (Rera). It extends its coverage to include projects facing insolvency proceedings.
In addressing the underlying issues leading to project delays, the government formed a committee, headed by former NITI Aayog chief Amitabh Kant. The committee’s findings shed light on the primary stressor afflicting real estate projects- financial viability. To counter this, a comprehensive set of recommendations has been put forth, with a focus on improving the financial health of these projects, ensuring their completion and facilitating the timely handover to homebuyers.
The committee’s report, unveiled in August, advocates for schemes mirroring those in the Micro, Small and Medium Enterprises (MSME) sector to attract funding from financial institutions. A key proposal includes a subsidised interest rate scheme, emulating successful models in other sectors. Additionally, the committee suggests the establishment of a guarantee fund, similar to the one in place for MSMEs, to instil confidence in financiers supporting these projects. The ministry of housing and urban affairs (MoHUA) has been entrusted with the task of formulating a detailed scheme, which will then be submitted to the ministry of finance for consideration.
The committee underscores the importance of prioritising steps to enhance the internal rate of return for these projects. This strategic move is expected to attract more funding and, perhaps most importantly, positions legal interventions such as the insolvency and bankruptcy code as a last resort.
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Dhwani is a content management expert with over five years of professional experience. She has authored articles spanning diverse domains, including real estate, finance, business, health, taxation, education and more. Holding a Bachelor’s degree in Journalism and Mass Communication, Dhwani’s interests encompass reading and travelling. She is dedicated to staying updated on the latest real estate advancements in India.
Email: dhwani.meharchandani@housing.com
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