The Union Cabinet on Wednesday approved the establishment of a 'Special Window' fund to provide priority debt financing for the completion of stalled housing projects that are in the Affordable and Middle-Income Housing sector.
For the purposes of the fund, the government shall act as the Sponsor and the total commitment to be infused by the Central Government would be up to Rs 10,000 crore.
Finance Minister Nirmala Sitharaman said at a press conference following the meeting that she has spoken to SBI, LIC and several sovereign funds to take the corpus of realty alternative investment fund to Rs 25,000 crore.
The fund will be set up as a Category-11 AIF (Alternate Investment Fund) debt fund registered with SEBI and would be professionally run.
For the first AIF under the Special Window, it is proposed that SBICAP Ventures Limited shall be engaged to be the Investment Manager.
"This fund would in turn would provide relief to developers that require funding to complete a set of unfinished projects and consequently ensure delivery of homes to the home-buyers," the government's statement said.
"Since the real estate industry is intrinsically linked with several other industries, growth in this sector will have a positive effect in releasing stress in other major sectors of the Indian economy as well," it added.