Following a cabinet meeting here, Finance Minister Nirmala Sitharaman announced that the ministry has formed an Alternative Investment Fund (AIF) with an initial investment of Rs 10,000 crore from the government, while the rest will be invested by the Life Insurance Corp (LIC) and the SBI.
The decision, which will also benefit projects that have been categorised as non-performing assets (NPAs or bad loans) or are facing proceedings in the National Company Law Tribunal (NCLT).
According to Sitharaman, the AIF will aid in completing 1,600 stalled projects across the country that will benefit about 4.58 lakh home buyers. She said that to make the scheme effective the size of the fund would be scaled up constantly and sovereign wealth funds, pension funds may also join the AIF later.
The Minister also said that SBI Caps will be the lead professional manager of the AIF and will assess the viability of stalled projects.
As per the guidelines, funds will be released into an escrow account maintained by the project manager. Money from it will be for projects which are near completion.
Sitharaman further said that there is no cap on the scale of completion of project but the fund will prefer releasing money for housing units where the completion level is higher.
"The idea is to provide immediate relief to home buyers who are paying EMIs for their stalled housing units and are also forced to pay rent due to delays," the Finance Minister said.
It has been decided that the AIF will be registered with market regulator Sebi, while the projects that qualify for funding will be required to be Real Estate Regulation Act (RERA) certified.
( With inputs from IANS )