Govt’s Rs 25,000 crore special window for stalled housing projects not adequate: ICRA

The rating agency ICRA in its latest report has said the government’s announcement of Rs 25,000 crore special window for about 1,500 stalled affordable and mid-income housing projects is not adequate. It said ‘while the revisions in eligibility criteria appreciably expand the project coverage under the fund, especially given the large number of stressed projects which have been referred to NCLT or classified as NPA already, our initial concerns on the adequacy of the fund, the efficacy and timeliness of implementation, and demand risks for the unsold inventory associated with these projects, remain.’

According to the ICRA estimates, around Rs 35,000-45,000 crore would be required to fund the completion of the revised quantum of 4.58 lakh eligible dwelling units. Thus, it said even the enhanced fund size of around Rs 25,000 crore may be insufficient to cover construction cost for all the eligible houses.

With an aim to complete stalled housing projects in the country, the government had approved setting up of a Rs 25,000 crore bailout fund to finance 1,600 stalled housing projects, including ones that have been declared NPAs or admitted for insolvency proceedings, as it looks to boost growth by steering consumption in real estate and associated sectors. The move is likely to help 4.58 lakh housing units across the country.