On Thursday, finance Minister Nirmala Sitharaman maintained that renewing stalled real estate projects in the economy will significantly improve the economic sentiment in the country, that has been severely affected by the second wave of Covid-19.
Additionally, renewing stalled real estate projects will boost the portfolios of banks and non-banking financial companies (NBFCs). The Finance Minister articulated her opinions at a virtual event, where she handed over possession of Rivali Park to home buyers.
Reportedly, the Mumbai-based project, which had been stalled for some time, was completed under the Centre’s special liquidity window. Centre’s special liquidity window is a special Window for Affordable & Mid-Income Housing (SWAMIH-I). According to reports, this is the first residential project completed by SWAMIH, which was created in 2019 to fund stuck affordable housing projects.
The Finance minister stated that “The government had stepped in to provide funding to the stressed affordable and mid-income housing projects, thereby giving relief to the home buyers who had invested their hard-earned savings. The government believes that once these homes are constructed and completed, a large amount of capital locked up in these projects will be released,”.
She additionally added that “It will generate employment for construction workers and will provide impetus to allied industries such as steel and cement. Further, it will improve the portfolios of banks and NBFCs and significantly boost the economic sentiment in the nation.”
Announced in September 2019, by Sitharaman, SWAMIH, a category-II alternative investment fund, was approved by the Cabinet in November 2019. SWAMIH is currently the largest real estate private equity team in the country, which has scaled up from a two-member team at the time of launch to 37 members now.
Nirmala Sitharaman stated that “I am very pleased to see that SWAMIH Fund has completed its first residential project. More so, it is an important achievement since the Fund has worked its way through the difficult period of the Covid-19 pandemic,”. Additionally, the Finance Minister added that “The Fund, under which 640 people are getting homes today, will benefit 116,000 Indian families.”
The Rs 12,500-crore fund, with a green-shoe option of an additional Rs 12,500 crore, provides financing to enable completion of projects. Under the government’s ambitious real estate scheme two big projects namely Mumbai’s CCI Rivali Park and Urban Land Amangani, Rewari were developed.
Dinesh Kumar Khara, the State Bank of India (SBI) Chairman, who also attended the event, stated that the Fund was being managed to achieve the huge expectations of the government that had been laid out before SBI and partners.
The SBI Chairman maintained that the SBI group is committed to working in line with the government’s vision to revive the real estate sector and provide relief to a large number of home buyers.
Khara maintained that in the past 15 months, SBI has made significant progress to increase the scale of operations to a level that is generally achieved in three-four years by other private equity funds. Reportedly, the Fund is targeting to complete 116,600 units at a sanctioned cost of Rs 18,546 crore.
Reportedly, so far, SWAMIH has approved 72 projects for completion of 44,100 housing units. Preliminary permission has also been granted to 132 projects covering 72,500 units.