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Boost for realty: Govt, SBI, LIC create Rs 25k-cr fund for stalled projects
Move comes a day after Finance Minister Nirmala Sitharaman announced the government was readying more reform measures to boost economy
Finance Minister Nirmala Sitharaman on Wednesday announced that the Union Cabinet had approved setting up of an alternative investment fund (AIF) with an initial corpus of Rs 10,000 crore to help revive stalled housing projects in the middle- and low-income group. She also said that she had spoken to State Bank of India (SBI), Life Insurance Corporation (LIC) and others to take the corpus of the realty AIF to Rs 25,000 crore.
"Many home buyers approached us where they had paid advance but flats were not complete.
Our survey showed approx 458,000 housing units were stuck in India. Over 1,600 realty projects were stuck," she said while talking to reporters in the national capital.
The decision came a day after Sitharaman hinted the government was planning more reform measures to boost growth. Speaking late on Tuesday, Sitharaman had said the government was working on steps to resolve the issues being faced by the real estate sector, which had had a spillover effect on many industries. "Government will soon use its strong electoral mandate to usher in the next wave of reforms, and not to miss the bus this time," she had said.
It should be noted that many analysts have been calling for urgent reforms in the factor markets, especially regarding land and labour, to get the economy out of the trough, citing the strong political mandate the government enjoys.