Budget 2024: NAREDCO Advocates ₹50,000 Crore Boost for SWAMIH Fund to Revitalize Stalled Housing Projects
NAREDCO advocates budgetary relaxations, including input tax credits under GST and incentives for rental housing.
The National Real Estate Development Council (NAREDCO) has urged Union Finance Minister Nirmala Sitharaman to allocate an additional ₹50,000 crore in the upcoming budget for the financial year 2024-2025 to the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund. This move, according to NAREDCO, is crucial for completing stalled housing projects, benefiting both home buyers and the real estate industry.
In a letter addressed to the Finance Minister, NAREDCO also appealed for various budgetary relaxations, including the allowance of input tax credit under the Goods and Services Tax (GST) and incentives for rental housing. The objective is aligned with the broader goal of achieving "housing for all."
NAREDCO emphasized the instrumental role played by the SWAMIH fund in revitalizing numerous stuck projects, attracting renewed interest from both domestic and foreign investors in the Indian real estate sector. The association believes that extending the lending scheme would create a mutually beneficial scenario for the industry and homebuyers, who have finally been able to realize their long-pending dream homes.
Launched by the central government in November 2019, the SWAMIH Fund was designed to assist in the completion of over 1,500 stalled housing projects, including those declared non-performing assets or undergoing insolvency proceedings. The fund, managed by SBICAP Ventures, a subsidiary of the State Bank of India, has a current size of ₹15,530 crore.
As of November 16, 2023, the government reported the approval of 342 proposals under SWAMIH, totaling ₹37,554 crore. This is expected to benefit around 2,18,699 homebuyers and unlock projects worth ₹94,367 crore.
In addition to the SWAMIH fund, NAREDCO has put forth other requests, such as allowing input tax credit under GST, incentives for rental housing, and amendments to taxation policies. The industry body proposes exempting the tax burden on notional rental income to incentivize rental housing. It also suggests removing the ₹2 lakh limit on interest deduction under Section 24 of the Income Tax Act, 1961, for housing loans to stimulate housing demand.
To enhance liquidity for real estate projects, NAREDCO recommends granting MSME status to projects meeting specified criteria and allowing priority sector lending for real estate projects. These proposals, if incorporated, are expected to contribute significantly to the revival and growth of the real estate sector.
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