The Union Cabinet on Wednesday approved the establishment of a ‘Special Window’ 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 funds to be set up, the government shall act as the Sponsor and the total funds committed by the Government would be upto INR 10,000 crore. The funds will be set up as Category-II Alternate Investment Fund registered with SEBI. These funds would be entrusted to professional Investment Managers. For the first AIF under the Special Window, it is proposed that SBICAP Ventures Limited shall be engaged to be the Investment Manager.

The Special Window would provide funds to stalled housing projects enabling them to complete unfinished projects and consequently ensure delivery of homes to a large number of home-buyers.This will, in due course, help relieve the financial stress faced by a large number of middle class home buyers who have invested their hard earned money. This will also restore trust between buyers and developers and boost the sentiments of the housing sector as a whole and release large amount of funds stuck in these projects for productive use in the economy.

The creation of special window for affordable and middle income housing projects would revive the real estate sector and generate considerable employment. Besides, revival of the sector will also lead to demand of Cement, Iron & Steel Industries giving further impetus to generate more employment. This initiative will have a positive effect in releasing stress in other major sectors of the Indian economy as well.

Taking into account the stress in the housing and construction industry, many measures have been undertaken by the Government to boost the housing sector, which are listed below:

IT deduction on Affordable Housing: Additional deduction up to INR 1,50,000 of interest paid on loans borrowed up to March 31, 2020 for purchase of houses valued up to INR 45,00,000 has been announced
Repo rate/external benchmark linked loan products: have been launched by Banks
Pradhan Mantri Awas Yojana: Under PMAY-Urban, 90 lakh houses have been sanctioned so far and 27.16 lakh houses had been completed by the end of September, 2019. Allocation of INR 1.42 lakh crore of central assistance has been provided for PMAY(U) for housing projects with an investment of INR 5.54 lakh crores. Under PMAY (G), out of a cumulative target of 1.5 crores, 84.4 lakh units have been completed. Rest are under construction.