Rs 25 000 Crore Boost To Real Estate

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WHAT IS ALTERNATIVE INVESTMENT?

An alternative investment is a financial asset that does not fall into one of the conventional investment categories.
Conventional categories include stocks, bonds, etc.

In India, alternative investment funds (AIFs) are defined in Regulation 2(1) (b) of Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.
It refers to any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company or a body corporate.
The funds which come under AIF are-:
Venture Capital Funds
PIPE (Private Investment in Public Equity ) Funds
Private Equity Fund
Debt Funds
Infrastructure Equity Fund
Real Estate Fund
SME Fund
Social Venture Funds

The government has announced the creation of an Alternate Investment Fund (AIF) with a targeted corpus of Rs 25,000 crore for the completion of stalled housing projects.
The government would inject Rs 10,000 crore in the fund and institutions like the SBI and the LIC will come up with the rest to take the corpus to Rs 25,000 crore.
Sovereign funds and pension funds will be allowed to invest in the category II AIF.
Through this, government hopes to take the corpus even higher.

The fund’s objective is to address the concerns of distressed homebuyers who have paid an initial amount to builders.
But due to various reasons haven’t received their apartments/flats.
The fund aims to finish such housing units in a time-bound manner.

When the fund was announced in September, the government said that
Only those projects which haven’t been categorised as NPAs And are 60% complete can access the fund.
But in the latest announcement, the government has waived of these two conditions.
The only condition that has been kept is that:-
The project should be net worth positive.
It should be RERA registered.

According to data provided by ANAROCK,
A total of 5.76 lakh units — launched in 2013 or before — across budget project segments are stuck in various stages in the top 7 cities in the country.

Matters became worse in 2009 for players in the real estate sector as a contraction in demand left many lenders struggling to repay existing loans to NBFCs and HFCs.
The real estate started showing signs of weakness from early 2017 after demonetization.
Also it was affected severely again in 2018 after infrastructure major IL&FS defaulted on loan payments.

The Rs 25,000-crore booster for affordable and middle housing projects will immediately trigger demand for labour, cement and steel.
These core sectors have traditionally been major job creators.
The realty fund will speed up the completion of the stalled housing projects, thereby sparking demand in the allied sectors — such as transport — as well.