Finance Minister Holds Review Meeting on Special Window for Stressed Residential Projects to Boost Investment in the Real Estate Sector

· Rs. 8767 crore Approved for 81 Projects; Enable the Completion of almost 60,000 Homes across India

· Activation of Construction Sites by the Special Window would provide Employment Opportunities for various Skilled and Semi-skilled Labourers

Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman, on 23 July, 2020 reviewed the performance of Special Window for Affordable and Mid Income Housing (SWAMIH)with Secretaries of Ministries of Finance and senior management team of the State Bank of India, SBI Capital Markets Limited and SBICAPS Ventures Limited (SVL).The fund has so far approved 81 projects with an investment of Rs 8767 crore.

The SWAMIH Investment Fund I has progressed from a policy announcement to an operational initiative on the ground. It has approved 81 projects that will enable the completion of almost 60,000 homes across India. These projects are spread across a mix of markets including large cities such as NCR, MMR, Bengaluru, Chennai, Pune and also Tier 2 locations including Karnal, Panipat, Lucknow, Surat, Dehradun, Kota, Nagpur, Jaipur, Nashik, Vizag, Chandigarh etc. (Annexure 1). Amongst these projects, investments in 18 projects have been given final clearance and disbursement is at various stages across 7 residential projects (Annexure 2).Applications from 353 stressed projects are under examination for provision of assistance. It was also highlighted that activation of these construction sites by the Special Window would provide employment opportunities for various skilled and semi-skilled labourers. Additionally, the Fund is actively evaluating options to provide relief to Rs.15,000 home buyers in certain long- stalled projects which are pending before the Honourable Supreme Court for resolution.

While reviewing the performance achieved by the Special Window, the Finance Minister appreciated the efforts. The recent initiative by the Fund to reduce the cost of capital to 12% has resulted in an increase in the number of projects that meet the funding criteria laid out under the Special Window. While acknowledging the steps taken by the Special Window to expedite participation from existing lenders, Smt Sitharaman suggested that both private and public Banks, NBFCs and HFCs should see the Special Window as a stakeholder and increase support early completion of stressed projects.

The Team also apprised the Finance Minister about the control mechanisms being built in by the Fund to monitor project progress and ensure prudent utilisation by calibrating investments in line with project progress. These steps would also bring in greater transparency in the sector in terms of accountability of project cash flows and eliminating diversion of funds.

During review meeting, the Finance Minister asked the Department of Economic Affairs to closely monitor the performance of the SWAMIH Investment Fund I in order to ensure that the capital raised by the Fund is rapidly committed towards resolving stressed projects and remove any impediments that could arise in this process. Smt. Sitharaman also wanted speedy efforts to complete construction of projects for which last mile funding has been sanctioned. The opportunity provided by the special mandate in this Fund combined with active support from existing project financiers should be directed towards this objective of providing immediate relief to homebuyers. Smt Sitharaman stated that this Special Window was an unprecedented initiative that has provided extraordinary support to the real estate sector and poised it at the cusp of a turnaround despite such turbulent economic times.