The government plans to launch the successor to its alternative investment fund for distressed housing projects with a corpus of Rs 15,000 crore ($1.73 billion), Finance Minister Nirmala Sitharaman said in her budget speech Saturday.
The second vehicle under the government-sponsored Special Window for Affordable and Mid-Income Housing (SWAMIH) for real estate projects comes six years after the fund was first floated.
The launch of the second fund was a longstanding demand of industry stakeholders. The first fund, managed by SBI Ventures Ltd, was announced in November 2019 with a corpus of Rs 10,000 crore to revive stalled residential projects. A 2019 study by real estate data and analytics firm PropEquity showed that about 1,500 projects with 4.58 lakh housing units were stalled or stressed in India and that these projects required funding of about Rs 55,000 crore for completion.
“SWAMIH Fund 2 will be established as a blended finance facility with contribution from the government, banks and private investors. This fund of Rs 15,000 crore will aim for expeditious completion of another 1 lakh units,” the finance minister said while presenting the budget for 2025-26 in parliament.
Sitharaman also said that, so far, 50,000 housing units in stressed housing projects have been completed through capital infusion from the SWAMIH fund. “Another 40,000 units will be completed in 2025, further helping middle-class families who were paying EMIs on loans taken for apartments, while also paying rent for their current dwellings,” she said.
Despite the government’s efforts, however, the number of stalled projects has only risen. According to a PropEquity report published in August last year, the number of stalled housing projects had increased to 1,981 across 44 cities and towns. These projects have been stuck for over eight years, totaling nearly 5.10 lakh units. This is an 8% rise from 2018.
“Further investment through schemes such as SWAMIH to enable the completion of stuck projects will instill confidence in buyers to make purchase decisions,” Sharad Mittal, founder and chief executive of residential real estate investment firm Arnya RealEstates Fund Advisors said previously.
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