To boost housing and facilitate home buyers.Union Finance Minister Nirmala Sitharaman addressed a press conference today, 14 September 2019, on important decisions of the government.
FM announced relaxation of external commercial borrowing (ECB) guidelines for affordable housing. ECB guidelines will be relaxed to facilitate financing of home buyers who are eligible under the Pradhan Mantri Awas Yojana (PMAY), in consultation with Reserve Bank of India (RBI). This is in addition to the existing norms for ECB for affordable housing.
Further, the interest rate on house building advance shall be lowered and linked with the 10 Year G Sec Yields. Government servants contribute to a major component of demand for houses. This will encourage more government servants to buy new houses.
FM announced setting up a special window for affordable and middle income housing. The special window will provide last mile funding for housing projects which are non-NPA and non-NCLT projects and are net worth positive in affordable and middle income category.
The objective is to focus on construction of unfinished units. Government of India (GOI) on the lines of National Investment and Infrastructure Fund (NIIF), can contribute to the fund while rest of the investors would be LIC and other institutions and private capital from banks / sovereign funds / DFls etc.
The fund shall be set up as a category - II AIF trust and would be professionally run with experts from housing and banking sector. The fund size of Rs 10,000 crore will be contributed by GOI and roughly same amount from outside investors.
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