January 17, 2023, New Delhi: National Real Estate Development Council (NAREDCO) has submitted a letter to the Union Finance Ministry to launch SWAMIH-2 with a wider scope in a bid to continue to support the real estate sector in the country.
Appreciating the significant role the SWAMIH Fund played during the Covid period, and the effective solutions it provided, the apex body of India’s real estate sector, has sought provisioning of at least Rs 25,000 crore for this SWAMIH-2 fund in the upcoming fiscal FY 2023-24. NAREDCO noted that the Union Government and the Finance Ministry have continuously assisted in the positive transformation of the sector and have been guiding the industry in the right direction with adequate empowerment and suitable policies.
In its letter to the Honorable Union Finance Minister, Smt Nirmala Sitharaman, NAREDCO also sought the extension of the scheme to new projects. Emphasizing the need to widen the ambit of the scheme, it has also recommended including stress-free projects and commercial projects to the list of beneficiaries.
“The SWAMIH Fund was one of the most innovative and effective tools which helped solve the problem of last-mile funding of stalled housing projects to a great extent, bringing relief to several distressed home buyers. Extending the duration and expanding the scope of this fund would do wonders. Allocation of at least Rs 25,000 crore for next fiscal alone shall boost the economy, create more jobs and attract huge investments,” said Mr. Rajan Bandelkar, President, of NAREDCO.
The apex industry body which comes under the aegis of the Union Ministry of Housing and Urban Affairs has also recommended that the fund should support complete project funding without factoring in the sales inflows.
It also suggested that under the special purpose fund, funding should be provided to all projects irrespective of their risk rating, however, with close monitoring of projects and airtight processes.
Mr. Sathish Kumar M, Chairman, NAREDCO Finance Committee (NFC) said, “Relaxing the eligibility criteria for SWAMIH fund beneficiaries, with strict monitoring and oversight would lead to massive growth in the realty sector and the economy as a whole along with ensuring compliance and benefits to the genuine beneficiaries. As the fund in its first phase supported stalled housing projects, it should also be extended to the commercial space as it would have multilateral effects ranging from a boost in realty to retail sectors.”
NAREDCO Finance Committee (NFC) was launched in October 2022 to look into all the financial aspects and funding processes for real estate development throughout the country and suggest ways to improve the financial base of real estate developers. It enables developers to have easy access to funds based on the merit and viability of the projects.
It facilitates its members to access funds professionally while matching its members’ financing requirements with the banks, financial institutions, and Non-Banking Financial Companies lending to the real estate sector.
SWAMIH Investment Fund was formed to complete the construction of stalled, brownfield, RERA-registered residential developments that are in the affordable housing or mid-income category, and are net worth positive, and require last mile funding to complete construction.
The recommendations come at a critical time when the sector has emerged out of the pandemic but inflationary pressures continue amid global headwinds.
