Business Educational Legal Nation Women

Rs. 10,000-Crore push for affordable housing projects: Nirmala Sitharaman

New Delhi: Finance Minister Nirmala Sitharaman announced funding for housing projects not in a bankruptcy process or declared as NPAs.

Finance Minister Nirmala Sitharaman on Saturday announced a special window of Rs. 10,000 crore to boost affordable and middle-income housing. The move was announced as part of a third instalment of steps within three weeks to boost the economy, which grew at its slowest pace in six years in the first quarter of the current financial year.

The government will make funding available for “net worth positive” housing projects that are not in a bankruptcy process or classified as non-performing assets (NPAs), Nirmala Sitharaman said.

The window will provide “last mile funding” for eligible housing projects which are net worth positive, an official presentation said. (Also read: Clear sign of revival in industrial production, says Nirmala Sitharaman)

The objective is to focus on construction of unfinished units, it said.

In addition to the government’s contribution of Rs. 10,000 crore to the fund, roughly the same amount will be sourced from external investors. The fund will be managed by professionals, the Finance Minister added.

The Finance Minister said the government would relax external commercial borrowing (ECB) guidelines to help housing developers obtain overseas funds.

Ms Sitharaman also said the interest rate on housing building advance will be lowered and linked to the 10-year government securities (G-Sec) yields.

“Government servants contribute to a major component of demand for houses. This will encourage more government servants to buy new houses,” she said.

The Finance Minister also announced a slew of measures to boost exports, including a new scheme to incentivise exporters, called the Remission of Duties or Taxes on Export Product (RoDTEP).

The scheme will come into effect from January 2020 to replace existing dispensations including the Merchandise Exports from India Scheme (MEIS), which will continue till December 31, and “will more than adequately incentivise exporters than existing schemes all put together”, Ms Sitharaman said.

The estimated amount of revenue that the government will forego on the scheme is Rs. 50,000 crore, according to the official statement.

The latest bout of measures to push housing and exports comes at a time the economy is struggling against a six-year low rate of growth and lakhs of estimated job cuts due to low consumption.