Centre holds meetings with RBI over stalled real estate projects

The government is keen to resolve all the issues as investments by several homebuyers are stuck in stalled projects; Delhi NCR and Mumbai accounted for 77% of delayed or stalled projects

The Centre is holding meetings with bankers and the Reserve Bank of India (RBI) over stalled real estate projects, which pose risks to homebuyers and lenders.

Launched in 2019, the special window for affordable and mid-income housing (SWAMIH) investment fund revived several projects but further action is necessary, said government officials, according to a report in the Mint.

The SWAMIH Investment Fund I helped in the completion of 20,557 units over the last four years and seeks to handover another 81,000 homes in 130 projects across 40 tier-1 and tier-2 cities, once the approvals are in place, one of the officials said on condition of anonymity. The fund has concluded the entire cycle of evaluation, investment, construction, and successful redemption of 11 projects, the official added.

The SWAMIH investment fund I helped in the completion of 20,557 units since 2019 and seeks to handover another 81,000 homes in 130 projects across 40 tier 1 and 2 cities, once the approvals are in place, an official said on the condition of anonymity.

“Discussions are ongoing about whether SWAMIH requires more funds for an even more aggressive push," an official said on condition of anonymity.

The government is keen to resolve all the issues as investments by several homebuyers are stuck in these stalled projects, another official said.

He added that various solutions are being discussed among stakeholders, including commercial banks and regulators.

The Centre is also concerned about the risks faced by lenders from unfinished projects.

According to data from Anarock, a real estate services company, India’s top seven cities had 479,940 stuck or delayed housing units worth over Rs 4.5 trillion, as of May 2022.

While the Delhi NCR and Mumbai accounted for 77 per cent of delayed or stalled projects, Bengaluru, Chennai, and Hyderabad represented nine per cent of such units, according to the Mint report.

The recent meetings conducted by the Centre are part of the government’s effort to push the completion of unfinished projects.

The Ministry of Housing and Urban Affairs has set up a 14-member committee headed by former NITI Aayog Chief Executive Officer Amitabh Kant to look at issues related to stalled real estate projects and recommend solutions to complete them.

Prashant Thakur, senior director and head of research at Anarock Group, said, “If you look at the scale of stuck projects and the funding needed, SWAMIH fund alone cannot do it. Many private equity funds who are interested in entering this space are lobbying the government, but they want equal treatment as SWAMIH."