Stress Projects Fund will develop trust between buyers and developers: Pawan Kumar

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Pune, December 28, 2019: “The Stress Projects Fund set up by the government to rescue stalled housing projects will be made available only to those projects, which are solvent but are temporarily facing liquidity issues. If government and the other finance institutions invest in these projects, it will change the attitude of the buyers and build trust between them and the developers alike. We want to regulate the economic pipeline, which is blocked due to the crisis in the real estate sector since 2016,” said Pawan Kumar, Deputy Secretary and Director (Investment), Ministry of Finance, Government of India.

He was speaking in an Interactive session on Stress Projects Fund organized by CREDAI-Pune Metro on Friday. Pawan Kumar participated in the session through video conference.

Dignitaries including Irfan Kazi, CIO, SBI CAP Ventures Ltd, Suhas Merchant, President, CREDAI-Pune Metro, Shantilal Kataria, Vice President, CREDAI National, Aditya Javdekar, Secretary, Sachin Kulkarni, Member, Managing Committee, Dr. D. K. Abhyankar, Director General and Urmila Julka, General Manager, CREDAI- Pune Metro were present during the conference.

The proposal to establish Rs. 25,000 crore funds to rescue stalled projects is being done to bring credibility in the sector, said Pawan Kumar. He further added that 13 banks are involved in the investment structure and the funds will be made available only for stalled projects and not for upcoming projects.

Irfan Kazi said, ”There are 1,509 projects and 4.58 lakh units stalled in India with the requirement of Rs 55,000 crore funding to enable completion of the projects.”

Stating the limits for fund entitlement, Kazi stated, “Not more than Rs 400 crore will be allotted in a single project or SPV. The project should be atleast 30% complete. Also, not more than Rs 800 crore will be allocated to any one developer. Maximum of 40% of the capital commitments will be allocated in any one city.”