Government to provide 25000 crore to the infrastructure sector for stalled projects


The finance minister, Nirmala Sitharaman recently announced that 25,000 crores to be disbursed as an alternative investment fund, with an aim to bring relief to developers as well as to give the sector a boost. The fund will provide aid to 1600 stalled real estate projects that can now be completed. There were no funds for non-performing assets and through this that would be made available.

The only projects with a positive net-worth have been registered under RERA will be given funding, the number of properties that will benefit from these funds will be around 0.5 million. The centre will give 10,000 crores and remaining funds will be given by Life insurance corporation and State bank of India. The MD of Design-build, Koshy Varghese, said that the debt to the finance ratio which is being provided by the government is minuscule. Taking into account 90 percent of the total debt is currently owed by only 10 percent of the developers, mainly the larger ones, the question remains as to how the government will ensure that the intended financial boost will trickle down to small developers? There is no deadline as to how will the funds will be allocated. He also said that incentives need to be provided to the public to purchase housing units, which help in raising funds for the developers. The rise in demand will also lead to demand for construction materials and assuage the stress in other major sectors in the economy. This money will provide relief to 4.5 lakh home buyers.

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