What is meant by Alternative Investment fund? How does it help to revive the stressed real estate sector? Also the discuss the impacts arising after the revival of the sector.(200 Words)
Refer - The Hindu
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
Alternative Investment Fund
Alternative investments include private equity or venture capital, hedge funds, managed futures, art and antiques, commodities, and derivatives contracts. Real estate is also often classified as an alternative investment.
Reviving the sector
· The Rs.25,000 crore Alternative Investment Fund (AIF) announced by Finance Minister has expanded in both size and scope.
· The fund, to be managed by SBICAP Ventures, will offer support to viable projects with a positive net worth and registered with the Real Estate Regulatory Authority.
· What makes the scheme good is that it will also apply to projects that have been declared as non-performing assets by banks and to those lined up before the insolvency court.
· Apart from real estate promoters, this will also aid lenders, mainly finance companies and banks, whose funds are locked up in these projects.
· Most of the stalled projects are solvent but stuck for liquidity and with support from the AIF, can be completed, unlocking value not just for buyers but also precious cash for the project promoters and their lenders.
Impacts after the revival
· The real estate sector is not only one of the biggest provider of jobs but also has a huge multiplier effect in the economy.
· Industries ranging from cement and steel to paints and sanitaryware stand to reap the benefits of a healthy real estate sector.
· The critical part will be identifying the genuine projects in need of support and ensuring that biases do not creep in.
· These need to be followed upon quickly and money should be released from the AIF right away so that the trickle-down effect is felt before the end of this financial year.
· Along with private money in the AIF will also come return expectations that need to be managed.
· The government, through its latest move, and the Reserve Bank of India with successive rate cuts and liquidity infusion, have set the stage. The real estate industry now has to do its part.
Chinna 5 years
IAS Parliament 5 years
Good answer. Keep Writing.
Noor Ahmed 5 years
Please review asap
IAS Parliament 5 years
Try to underline the key points and elaborate about the impacts. Keep Writing.
Vendhan 5 years
Tn
IAS Parliament 5 years
Try to elaborate the impacts. Keep Writing.
Pocomaster 5 years
Review ASAP! Thank You!
IAS Parliament 5 years
Try to elaborate the impacts. Keep Writing.
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