Decoding AtmaNirbhar Bharat package for Indian developers & home buyers

Decoding AtmaNirbhar Bharat package for Indian developers & home buyers

Property & Real Estate

Virendra Adhikari

Virendra Adhikari

218 week ago — 6 min read

On 12th May 2020, Indian Prime Minister Narendra Modi announced INR 20 lakh crore (~270 Billion USD) economic relief package to help individuals and businesses deal with COVID-19 pandemic crisis, and to turn this crisis into an opportunity to build a Self-Reliant India “AtmaNirbhar Bharat”.  Outlining his vision for a Self-Reliant India “AtmaNirbhar Bharat” that will be based on five pillars - economy, infrastructure, technology driven systems, demography and accordingly, he said the focus of the relief package will be on 4 Ls, what can be identified as factors of production i.e. land, labour, liquidity and law.

In continuation with the Prime Minister’s vision for a self-reliant India, the Finance Minister Nirmala Sitharaman, uncovered the details of INR 20 lakh crore economic relief package. She revealed these relief measures in tranches, while the first tranche focused on micro, small, and medium enterprises (MSMEs), taxpayers, non-banking financial companies (NBFCs), power distribution companies, the real estate sector, organised sector employees and contractors working with the government, the second tranche focused on migrant workers, farmers and urban poor.

The Finance Minister has announced several measures to safeguard home buyer’s interest and de-stress developers. The government has also tried to address the migrant rent issue by providing affordable rental housing schemes. 


Considering the adverse impact of the Covid-19 pandemic crisis and the nationwide lockdown, real estate projects stand the risk of getting stalled and not getting completed/delivered on set timelines. The Finance Minister has announced several measures to safeguard home buyer’s interest and de-stress developers. The government has also tried to address the migrant rent issue by providing affordable rental housing schemes. The 4 key measures announced by government addressing the issues of the real estate sector are -

  • Extension of completion dates for Projects - The States and UTs are advised to extend the registration and completion date automatically by six months for all registered projects expiring on or after March 25, 2020 without individual applications , and if required individual state RERA may extend this for another period of up to three months. Individual state Regulatory authorities are free to issue fresh Project Registration Certificates automatically with revised timelines and can also extend timelines for various statutory compliances under RERA concurrently.

  • Affordable Rental Housing Scheme for Migrants - To address the migrant rent issue, the government has decided to convert government funded houses in the cities into Affordable Rental Housing Complexes (ARHC) under PPP [public-private-partnership] mode. While the complete details are yet to be announced, to create more land availability for this scheme, the government announced that the centre and state can utilise public land for this purpose.

  •  Extension of Credit Linked Subsidy Scheme Under the Prime Minister Aawas Yojana (PMAY) - The Credit Linked Subsidy scheme for people in the middle income group -- annual income between Rs 6 lakh and Rs 18 lakh, which was previously extended from May 2017 to March 2020, is now extended for 2020-21. This is expected to benefit 250,000 Middle Income Families leading to investment of over 70,000 crores in the housing sector. The finance minister added, “This will create a significant number of jobs by giving a boost to the housing sector and will stimulate demand for steel, cement, transport and other construction materials.”

  •  Liquidity infusement in the system -  to Infuse much required liquidity in the system, particularly for small businesses and rural sector enterprises, the government announced a INR 30,000 crore special liquidity scheme for NBFCs, housing finance companies (HFC) and micro-finance institutions (MFIs). The scheme will be 100% guaranteed by the Union government. Another INR 45,000 crore partial credit guarantee scheme is also planned to cover the borrowings of lower rated NBFCs, HFCs and MFIs. The government will provide a 20% first loss sovereign guarantee to public sector banks.

The measures announced by government will ease the burden on developers, enable them to complete the projects so that home buyers get the delivery of their booked houses within the revised timelines. Overall, these announcements provide the much required breather to the real estate sector that was already grappling with weak demand and liquidity crunch and provide the much needed lifelines to help it survive the COVID-19 crisis.

Also read: How is the real estate sector impacted by COVID-19

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Virendra Adhikari

Asset India is a London-based company that helps NRIs and PIOs buy and sell Indian real estate. And helps them grow their wealth in the process. we are currently serving NRIs/PIOs...

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