To provide last-mile funding to stalled real estate projects that are net worth-positive, the Cabinet has given its nod for setting up a special window — Alternative Investment Funds (AIFs) .

There are 1,600 stalled projects and the totalcost to complete these is estimated at ₹55,000-80,000 crore. This special window created for affordable and middle-income housing projects will also cover projects that are classified as non-performing assets (NPA), or where National Company Law Tribunal (NCLT) proceedings have already started. In the latter case, however, the project should not have gone into liquidation.

“The government shall act as the sponsor of the fund. It will infuse funds up to ₹10,000 crore. The fund will provide relief to developers with unfinished projects and ensure delivery of homes to buyers,” said Finance Minister Nirmala Sitharaman.

Besides the Centre’s ₹10,000 crore, SBI, LIC and other public sector financial institutions will also pump in money into the fund, taking the figure to around ₹25,000 crore. The government expects sovereign funds and pension funds to contribute at a later stage.

The scheme will cover dwelling units of up to ₹2 crore in Mumbai, ₹1.5 crore in Delhi-NCR, Chennai, Kolkata, Pune, Hyderabad and Bengaluru, and up to ₹1 crore in other parts of the country.

The funds will be set up as category-II AIFs registered with SEBI. For the first AIF under the special window, it is proposed to engage SBICAP Ventures Ltd as the investment manager.

**The project funding will be construction-linked under the scheme. In case the promoter is in jail following NCLT proceedings, the resolution professional will take care of the projects under the scheme. If the project cost is subtracted from the cash flow and the end result is positive, the project will be termed networth-positive.

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