`25,000-cr fund, `15-cr disbursal
While thousands of stalled housing projects are waiting for a lifeline, the Rs 25,000-crore Alternative Investment Fund, launched by the government last year, has made disbursement to just one project. Realtors say rigidity of the fund is the main impediment.
The AIF-SWAMIH Investment Fund was intended to provide a special window to expedite completion of stalled affordable and midincome housing projects. According to government data, around 4.58 lakh housing units are stuck in India across over 1,600 stalled realty projects.
The fund had closed its first tranche of Rs 10,500 crore as well. However, it has disbursed only Rs 15 crore till date to one project by Cable Corporation of India in Mumbai, in which the existing lender is India Bullls Housing and Finance, as per the data from real estate body Credai.
According to Credai, in the initial days, there was lack of clarity about including projects classified as non-performing assets and those which have gone to the National Company Law Tribunal. However, the main constraint in the operationalisation of the fund is the rigidity in its mandate.
"This was a good initiative for reviving stalled projects. However, the AIF has not been recognising the existing lender, which could be a bank, NBFC or HFC. Ideally, the receivables of the project should be shared in the same proportion of the debt between the lender and the fund. However, here the receivables were first going to the fund and the lender's debt was considered subordinate. Hence, most of the projects have not received a No Objection Certificate from the lender," said Pankaj Goel, secretary, Credai.
Further, the AIF expects a return of about 12-15 per cent on its investments in projects, which is very high given the fact that the projects in the ambit of the fund are "stalled". The return on investment (RoI) can be 8 to 9 per cent, said Satish Magar, president, Credai.
"When the repo rate has been 4 to 5 per cent, after the administrative charges of 1- 1.5 per cent, a spread of 8 to 10 per cent is quite high. This high RoI leads to an increase in the project cost, which eventually gets passed on to the already aggrieved homebuyer," said Goel.
The fund was cleared by the Union Cabinet last November, with the government earmarking Rs 10,000 crore for it. Life Insurance Corporation of India and State Bank of India were also to infuse money into the fund managed by SBICAP Ventures. The fund was created to provide relief to developers with unfinished projects and ensure delivery of homes to buyers.
Mumbai, May 25: In a rare decision amidst the unprecedented situation caused by the coronavirus pandemic, the Maharashtra government has directed banks to transfer the outstanding crop loans to the state's account in a bid to make farmers eligible for fresh credit.
A government resolution (GR) dated May 22 instructed banks to show the current outstanding loan of farmers as the dues of the state government.
"This decision will clear the accounts of farmers and they will become eligible for fresh crop loan. The decision is applicable for the crop loan outstanding as on April 1 this year. The capital and interest on it will be paid by the state government," the order said.
"It is a very rare decision undertaken by the state government. The government has given its guarantee to some cooperative enterprises but rarely it has taken the burden of farmers," a senior official from the state cooperation department said on Sunday.
The GR stated that the loan waiver scheme of the government was being partially implemented because of the coronavirus outbreak followed by the lockdown.
"Some 60 per cent farmers have been covered under the scheme so far. As there are no funds with the state, 11.12 lakh account holders are yet to receive Rs 8,100 crore," the official said.