Government’s recently proposed last mile funding plan through Rs. 20, 000 crore stress asset fund may not be as ineffective as perceived by some of the industry experts. As per a recent report, as many as 2.5 lakh affordable and middle segment housing units that do not come under NCLT but are stuck across top seven cities can avail relief from the government’s proposed plans.
Out of 2.5 lakh stalled units expected to get relief, 92,350 units are in MMR while 60,700 units in NCR. Pune has 67,240 units that are stalled and expected to get revived by government’s last mile funding, as per ANAROCK report.
It is true that projects by Jaypee, Amrapali and Unitech in NCR do not qualify for the funding boost. However, out of 60, 7000 units that are expected to get relief, at least 30,030 units are in the affordable category while the remaining in the mid-segment.
Overall, there are about, 4 lakh units that are stuck in various stages of non-completion across budget segments that don’t fall under NCLT. Out of this, nearly 63 percent (or 2.5 lakh units approx.) are within affordable and mid segments across top 7 cities.
Since the last-mile funding is targeted to benefit only affordable and mid-income segment, delayed premium homes that constitute about 1.5 lakh units or 37 percent of the total stalled units will have to wait longer.
“Among the key issues that remain, the price definition of mid-segment homes that can avail of this benefit tops the list,” Money Control quoted Anuj Puri, Chairman – ANAROCK Property Consultants, as saying. “Secondly, the timeline for setting up this fund and its actual implementation needs clarification. If the implementation process is delayed over the next four to five months, more units could either turn into NPAs or fall under NCLT – thus eliminating their eligibility for this funding.”
Finance Minister Nirmala Sitharaman on September 14 announced a special window worth Rs 20,000 crore for last-mile funding for stalled units in affordable and mid-segment housing projects only. These projects should have achieved around 60 percent completion, but lack cash flows for the balance amount.
Here is what real estate experts have to say about last mile funding.