Affordable Housing Fund Current Affairs - 2020

Asian Development Bank to invest 100 million USD in NIIF

On March 30, 2020, the Asian Development Bank announced that it is to invest 100 million USD in National Investment and Infrastructure Fund (NIIF). The investment during an economic slow down is a great boost for the Indian Economy.

NIIF

The National Investment and Infrastructure Funds were set up in 2015. The main purpose of the fund is to aid Greenfield and brownfield projects in the country. When an entity is to use the benefits of the funds, the Indian Government invests 49% and the rest has to be raised from third party investors.

The NIIF makes it mandatory that the funds shall be invested in the areas such as transportation, energy, water, housing, waste management.

Major funds of NIIF

There are three major funds under NIIF. IT includes Master Fund, Fund of Funds and Strategic Investment Fund

Master Fund

This is an infrastructure fund. These funds shall be used in core infrastructure sectors such as ports, road, power, etc.

Fund of funds

The fund of funds shall be used on affordable housing, green infrastructure and infrastructure services. These funds are availed only to fund managers who have good track on infrastructure projects

Strategic Investment Fund

This fund is registered under SEBI. These funds focus on green field and brown field investments.

Finance Minister: Rs 25,000 crore Fund for stuck Housing Projects

On November 7, 2019, Government of India announced the establishment of Rs 25,000 crore fund for home buyers whose money is stuck in stalled projects. According to the Ministry of Finance, there are over 1600 such projects comprising of 4.58 lakh housing units across the country. The “Special Window” will prioritize debt financing in the Affordable and middle-income housing sector.

About the fund

  • Rs 10,000 crore is to be provided by GoI towards the fund. Other firms like LIC and SBI along with sovereign wealth funds and pension funds will contribute Rs 15,000 crore
  • The fund is to be set up as Category II Alternate Investment Fund.
  • The fund is to be registered with SEBI as an escrow account.

Highlights

  • Under the special window, the projects that have been declared as NPAs (Non Performing Assets) and other projects that are undergoing insolvency at NCLT are also allowed to be kick started

Significance

  • The fund infusion will help provide employment to workers and also help restore trust between buyers and developers
  • Reviving housing sector will increase demand for cement and iron and steel industries that will generate more employment
  • The special window will help releasing the stress in other major sectors of the Economy