SWAMIH Fund-2: Government's ₹15,000 crore plan to complete stalled projects
What's the story
Finance Minister Nirmala Sitharaman has announced a new ₹15,000 crore initiative, called 'SWAMIH Fund-2.'
"SWAMIH Fund-2 will be established as a blended finance facility with contribution from the government, banks and private investors. This fund of Rs 15,000 crore will aim for expeditious completion of another 1 lakh units," she said.
The move is aimed at providing relief to homebuyers whose money is stuck in these incomplete projects.
Previous accomplishments
SWAMIH Fund-2 follows successful completion of 50,000 units
The announcement of SWAMIH Fund-2 comes on the heels of the successful implementation of the initial SWAMIH Fund.
Sitharaman highlighted that under this fund, 50,000 dwelling units in stressed housing projects have been completed and handed over to homebuyers.
An additional 40,000 units are projected to be finished by 2025 to help middle-class families who were paying EMIs (equated monthly installments) on loans taken for apartments, while also paying rent for their current dwellings.
Fund impact
SWAMIH Fund-1: A lifeline for distressed projects
Under the SWAMIH Fund-1, ₹15,530 crore has been raised till now with an objective to provide priority debt financing for the completion of stressed, brownfield, and Real Estate Regulatory Authority (RERA) registered residential projects that fall in the affordable, mid-income housing category.
The fund is seen as the lender of last resort for distressed projects.
Project analysis
Study reveals extent of stalled housing projects in India
A 2019 study by data analytic firm PropEquity (commissioned by SBI Ventures Ltd) estimated that around 1,500 projects with 4.58 lakh housing units were stalled/stressed and needed an aggregate ₹55,000 crore to complete the stalled projects.
This highlights the massive challenge before the Indian real estate sector and the potential impact of initiatives like SWAMIH Fund-2.