The government's decision to set up a Rs 20,000 crore stressed assets fund for those residential projects that are non-NPA and not under NCLT will provide relief to lakhs of homebuyers, but it should have done more to boost housing demand, property developers and consultants said on Saturday.
They rued that the government has not adequately addressed the issue of demand slowdown and lower sales. Builders were also hoping for an increase in the price cap of affordable housing to beyond Rs 45 lakh.
To provide relief to aggrieved homebuyers, the government will set up a special window to provide last mile funding for housing projects which are non-NPA and non-NCLT in the affordable and middle income category. In the fund, Rs 10,000 crore will be contributed by the central government and roughly the same amount will come from outside investors.
"The government has just scratched the tip of the surface with the recent announcement. They are not realising the gravity of the situation. Real estate industry is the second largest contributor to our GDP and creates millions of employment opportunities. Hence, we expect much more support," CREDAI Chairman Jaxay Shah said.
"We all our working towards realising Prime Minster's dream for housing for all by 2022 but it is becoming challenging if the requisite policy reforms will not be announced," he added.
NAREDCO President Niranjan Hiranandani said the announcement of Rs 20,000 crore fund is a welcome step as it will ensure completion of many affordable and MIG projects stuck because of last-mile funding requirements.
On the rider that this fund will cater to only non-NCLT and non-NPA projects, he said this announcement will not solve the problem of delayed/ stalled projects and affected home seekers in locations like Delhi-NCR.
Anarock Chairman Anuj Puri said the stressed asset fund is a "major boost to the housing sector (affordable and mid segment) and a perfect festive treat for lakhs of homebuyers who have been anxiously waiting for their prized possession."
Dhruv Agarwala, Group CEO of PropTiger and Housing.com, said the stress fund "could well be the lifeline the real estate sector, grappling with a slowdown, needs."
Gagan Randev, National Director (Capital Markets and Investment Services), Colliers International India, said: "This is a positive initiative as this is the biggest issue facing the industry today. Countless projects, which otherwise have surpluses, are stuck for want of as (in some case) as little as Rs 10-15 crore because of lack of last mile funding. If this can be implemented quickly, this would be a major boost to all such projects. The key is implementation."
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