15.9.19

Finance minister unveils Rs.10,000-crore window for affordable housing

The government announced a Rs.10,000 crore special window to provide last-mile funding for completion of ongoing housing projects which are not NPAs or facing bankruptcy proceedings under NCLT.

Announcing the measure, Finance Minister Nirmala Sitharaman said the government will contribute Rs.10,000 crore for the special window and roughly the same amount is expected from outside investors.

This window will help in completion of affordable and middle income housing projects. The fund will be managed by professionals, the minister added.

Sitharaman also said the interest rate on housing building advance will be lowered and linked to 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,” she said.

External commercial borrowing guidelines will also be relaxed to help housing developers obtain overseas funds.ECB guidelines will be relaxed to facilitate financing of homebuyers who are eligible under Pradhan Mantri Awas Yojna, in consultation with the central bank.

The fresh set of measures to boost the economy has come in the wake of sinking business sentiment across the industry.

With most engines of growth stuttering, the Reserve Bank of India recently lowered its GDP forecast and pegged it at 6.9 per cent in 2019-20. Several rating agencies and research firms expect the growth to be in the range of 6.5-7 per cent.

Besides domestic consumption slowdown, the external factors remain adverse threatening to pull down the economy. A lingering US-China trade war and fears of a global recession could make things worse.

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