REVITALIZING INDIA'S HOUSING DREAMS: NAVIGATING CHALLENGES BEYOND BAILOUTS THROUGH STRESSED FUNDS

Abstract [English]

India’s real estate market, particularly the residential sector, has grappled with significant challenges in recent years. Issues such as liquidity crises, the implementation of real estate regulations, the Goods and Services Tax (GST), and demonetization have compounded the sector’s woes, leading to over 1,600 stalled housing projects. These include projects classified as non-performing assets (NPAs) or admitted into insolvency proceedings. To address these concerns, the Indian government established a ₹25,000 crore Stress Fund. This initiative aims to revive 4.58 lakh housing units nationwide through a Special Window System.
The Special Window facilitates funding for projects with capital commitments exceeding ₹540 crore and registered under the Real Estate Regulatory Authority (RERA) with a positive net worth. By prioritizing affordable and middle-income housing projects, the fund seeks to rejuvenate the real estate sector while generating employment and alleviating stress across other industries in the Indian economy.
However, significant gaps persist. Projects outside RERA’s purview or entangled in legal disputes at higher courts remain excluded. This limitation leaves numerous housing projects ineligible for support, raising concerns about whether the Stress Fund can effectively revive the sector. A critical assessment of this funding scheme is essential to understand its potential, limitations, and impact on stakeholders, including industry players and homebuyers.
This study employs a doctrinal approach, emphasizing analytical reasoning to evaluate the Stress Fund’s framework. By exploring its benefits and addressing its shortcomings, the study aims to propose actionable remedies to ensure a comprehensive revival of India’s stalled housing projects.