The caveats announced along with the real estate funding package on Saturday may restrict the benefits proposed to home buyers in various stalled projects across the country.
In other words, the aggrieved buyers of some of the country’s biggest stalled projects, including that of Amrapali, Unitech, Jaypee, 3C and Ansal API, among others, will not benefit from the government’s announcement. At least 100,000 buyers are stuck in these projects in the National Capital Region alone. These developers along with several others have ongoing cases against them in the National Company Law Tribunal (NCLT), making them ineligible for the last-mile funding.
The government’s funding package is meant for residential housing projects in the affordable and middle-income categories, provided the project have not been declared as non-performing assets (NPA) and do not have a case filed against them in NCLT. To be eligible for the funding, the projects also need to be net worth positive.
“This is not for projects which are already under NCLT and have NPAs, given that delayed projects in both these categories are already undergoing due process under the existing set-up. For delayed and stalled projects--for example, in the NCR--this will be a major problem, given that most of them are under NCLT and have NPA, and will not get the benefit of this stress fund. This announcement will not solve the problem of delayed or stalled projects and affected home seekers in locations like NCR," said Niranjan Hiranandani, president, National Real Estate Development Council (NAREDCO), a real estate developer association.
According to research by ANAROCK property consultant, as many as 220 projects or 174,000 homes are completely stalled in the top seven cities. Most of these projects were launched either in 2013 or earlier. Most of these projects have been grounded due to either liquidity issues or litigations. NCR has the largest pile-up of stalled units with 118,000 homes (68% of the total stalled projects), followed by Mumbai with 38,060 stalled units, said the research.