Although finance minister Nirmala Sitharaman's announcement of Rs 25,000 crore fund for stalled projects brought relief to the real estate players and distressed home buyers, a section of home buyers rue their exclusion from the special aid.

Significantly, the major stalled projects under public gaze in the National Capital Region (NCR) — the projects of Jaypee Infratech, Amrapali and Unitech — have been excluded from the ambit of the fund on the ground of the ongoing judicial procedures in the projects.

The fund would not be used to support projects which are facing litigations in high courts and the Supreme Court, people in the know said. Further as the special window has only been created only for the affordable and middle income housing projects, several stalled houses are likely to miss the bus.

However, a number of doubts whether the fund would be adequate for the large number of stalled projects, given the fund also comes with several conditions.

"The fund announced is not sufficient to address the challenges in the sector but we would welcome this as the first step from the government to help complete the unfinished projects," said Honeyy Katiyal, founder of Investors Clinic.

"But, the move shows the good intent from the government. Covering 1,600 projects with 4.58 lakh dwelling units under the announcement will not only help in boosting buyer sentiments but generate considerable employment," he added.

Katiyal said that the move is expected to bring in positivity in the market which is missing due to various factors, including distress in lending by non-banking financial companies (NBFC).

Along with the announcement, the government needs to look at taxation reform as real estate players have to pay GST along with the stamp duty. Overall, the step is in the right direction but there is more that needs to be done, he said.

Market experts are of the view that the major stalled projects which would be out of the ambit of the fund can be be completed with "little" fund intervention from the government.

"I feel that the stalled projects with value of Rs 50-100 crore or upto Rs 500 crore investments need to be looked at. Intervention into the projects will showcase the implementation of government's move and show results at the earliest. With the kind of positive intent the government has shown towards the sector in the last few months, the bigger real estate players' projects can be solved," Katiyal said.

Market participants are of the view that completion of these stalled projects will boost market sentiments by far. A major feature of the cabinet decision for the realty sector was that it would also cover projects that are classified as non-performing assets (NPAs) or where National Company Law Tribunal (NCLT) proceedings have already started but with the rider that they meet other eligibility criteria.

Some of the conditions for getting the last-mile funding are projects being networth positive, registered with Real Estate (Regulation and Development) Act, 2016 (RERA) and falling in the category of affordable and middle-income housing project.

First Published:Nov 10, 2019 8:13 PM IST