Reportedly, while only projects with a positive networth registered under RERA will be given funding, the number of properties in India to benefit will be around 0.5 million. With the careful selection of projects, the government has effectively barred chances of risk.

“The real-estate sector plays a key role in deciding consumer sentiments and drives the confidence to spend,” comments Rajat Bahl, Chief Analytical Officer & Head - Financial Institutions, Brickwork Ratings. “The Government of India’s announcement of establishing an AIF aimed at priority debt financing for the completion of stalled housing projects in the affordable and middle-income housing sector will go a long way in providing much-needed relief to developers with funding requirements. It will also provide relief to homebuyers with investments in these projects. However, on a broader level, this may not completely address the urgent need of the sector that is plagued by huge unsold inventories. The need of the hour is to stimulate demand among homebuyers, which would then provide cash in the hands of developers to finish off other stalled projects.”

The Centre has put aside Rs 100 billion for the package while the rest of the amount will be covered by Life Insurance Corporation and State Bank of India. Following the announcement, industry experts hailed the decision as one that would finally help the realty sector emerge from stress. It is also expected to act as a force multiplier that will promote economic growth and development.

Hailing the decision,Chintan Patel, Partner and Leader - Building, Construction and Real Estate, KPMG India,says, “The Government has taken a step in the right direction to provide support to homebuyers and developers. It is good to see that projects that are currently NPA or under NCLT will also benefit from this. While the honourable finance minister has detailed a number of components of the plan, it will be interesting to understand some of the specifics in terms of tenure of investment, cost of funds to the developer, security package, etc.”

Additionally,Shishir Baijal, Chairman & Managing Director, Knight Frank India,says, “The inclusion of developments under NPAs and NCLT in the gamut of eligible projects, albeit net-positive projects, into the special window funding is a welcome decision. The extension of this benefit to mid-income beyond the affordable housing segment is a critical step forward. We welcome these changes and feel they will help create greater momentum in stock movement. Many projects that are near completion but have not been able to garner last-mile funds will benefit from this move. This step will definitely create greater confidence and credibility and may, in due course, encourage private segments to extend their support in last-mile funding, helping the beleaguered sector to get over this period of slowdown.”