Government approves Rs 25,000 crore alternate fund for stalled housing projects

News:Government has approved a Rs 25,000-crore special window to provide funding to stalled housing projects.

Facts:

Why this fund?

• The government expects this fund to revive the real estate sector, generate employment and provide a boost to the economy through demand for materials like cement.

About the fund:

• The fund will be set up as a category-II Alternative Investment Fund which will pool investments from the government and other investors. 
• The government will contribute Rs 10,000 crore while the remaining amount will be put up by the State Bank of India and the Life Insurance Corporation of India.
• SBICAP Ventures Limited will be the investment manager for the fund and decide on which projects are eligible for the funding.
• The fund will not be available for the projects that have entered liquidation.

Eligibility for the fund:

• If the project’s Net-worth is positive.
• Affordable and middle-income housing project.
• On-going projects registered with the Real Estate (Regulation and Development) Act (RERA).
• Include stressed projects classified as non-performing assets or those stuck in the National Company Law Tribunal.

Additional information:

About Alternate investment fund:

• Alternate investment funds(AIFs) are defined under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.
• It refers to any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors whether Indian or foreign for investing it in accordance with a defined investment policy for the benefit of its investors.

Categories of AIF:

• Category I: Mainly invests in start- ups, SMEs or any other sector which Govt. considers economically and socially viable.
• Category II: These include Alternative Investment Funds such as private equity funds or debt funds for which no specific incentives or concessions are given by the government or any other Regulator.
• Category III : Alternative Investment Funds such as hedge funds or funds which trade with a view to make short term returns or such other funds which are open ended and for which no specific incentives or concessions are given by the government or any other Regulator.