A committee of 14 members, established to address stalled real estate projects, has submitted its findings. The committee, led by former NITI Aayog CEO Amitabh Kant, was formed by the Union Ministry of Housing and Urban Affairs in March 2023. The report emphasizes that 4.12 lakh dwelling units worth Rs.4.08 lakh crore were deemed “stressed,” with 44% of them located in the National Capital Region and 21% in the Mumbai Metropolitan Region. The primary cause of project stress is cited as “lack of financial viability,” resulting in cost overruns and delays. To resolve this, the report recommends enhancing the projects’ Internal Rate of Return to attract funding. It also suggests various measures, including mandatory RERA registration, a rehabilitation package for stalled projects, and utilizing the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund.
UPSC Prelims Topics
- Internal Rate of Return (IRR): A financial metric used to evaluate the profitability of an investment. It represents the discount rate that makes the net present value of future cash flows equal to the initial investment.
- Real Estate Regulatory Authority (RERA): An agency established to regulate and promote transparency in the real estate sector. It aims to protect the interests of homebuyers and ensure timely completion of projects.
- Stalled Projects: Real estate developments that have been halted due to financial constraints, resulting in delayed completion and potential losses for investors.
- Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund: A government-backed fund designed to provide financing for stalled housing projects in the affordable and middle-income categories. Its objective is to complete unfinished projects and ensure timely delivery of homes to buyers.