Tribune News Service
New Delhi, November 6
The government today approved setting up of a Rs 25,000-crore bailout fund to finance 1,600 stalled housing projects as it looks to boost economy by kick-starting incomplete projects.
The decision was approved by the Union Cabinet at a meeting under the chairmanship of Prime Minister Narendra Modi.
Announcing the decision, Finance Minister Nirmala Sitharaman said the government would put Rs 10,000 crore in the alternative investment fund (AIF) while the SBI and LIC would provide Rs 15,000 crore, taking the total size to Rs 25,000 crore.
This will finance 1,600 RERA-registered stalled housing projects comprising 4.58 lakh housing units across the country, she added. The decision is also aimed at generating employment as well as reviving demand of cement, iron and steel industries.
She said even the projects declared non-performing assets (NPA) and the promoters of which were facing insolvency proceedings would also get support. “But every project taken up under the AIF has to have net worth in positive,” she said.
In a statement later, the government said, “The special window is being structured as an AIF to pool investments from other government-related and private investors, including public financial institutions, sovereign wealth funds, public and private banks, domestic pension and provident funds, global pension funds and other institutional investors etc. The fund is, therefore, expected not only to support the sector, but also generate commercial return for its investors.”
Following the creation of the debt fund, a detailed investment policy would be laid down to guide selection of projects to be financed through a detailed due-diligence process that would include due legal diligence, title diligence, micro-market analysis, financial analysis etc, it added.
The process would be supervised by an advisory board (on conflict of interest issues) and a governing council might also be formed for overall strategic guidance, it said.
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