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India's Union Budget 2025-26 unveiled a significant allocation of ₹15,000 crore for the second tranche of the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund. This injection of funds is specifically designed to address the persistent issue of stalled housing projects across the nation. The SWAMIH Fund 2, structured as a blended finance facility, will leverage contributions from the government, banks, and private investors to expedite the completion of an estimated 100,000 housing units. This initiative builds upon the success of the first SWAMIH fund, launched in November 2019, which has already facilitated the completion of 50,000 dwelling units and is on track to complete another 40,000 in 2025. The success of SWAMIH Fund 1, which raised ₹15,530 crore and invested in RERA-registered affordable and mid-income housing projects, demonstrates the effectiveness of this model in resolving a major hurdle in India's real estate sector. The completion of these units represents a significant step towards alleviating the financial burden on middle-class families who have been simultaneously paying EMIs and rent for years.
The need for SWAMIH Fund 2 is underscored by the fact that despite a boom in India's residential sector, the problem of legacy projects remains substantial. The fund is seen as a much-needed lifeline for both homebuyers and developers. Amit Goenka, managing director and chief executive at Nisus Finance, highlights the potential of SWAMIH 2 to bring hope to over one lakh homebuyers and provide respite to stressed developers. The positive impact of this initiative extends beyond individual families, as the completion of these housing units will stimulate economic activity and contribute to the overall growth of the real estate sector. The anticipation for SWAMIH 2 was evident for some time, with organizations like the National Real Estate Development Council (Naredco) actively urging the finance ministry to introduce the second tranche to address the widespread problem of stuck projects.
Beyond the allocation for stalled housing projects, the Budget 2025 also introduced a national framework aimed at promoting the establishment of Global Capability Centers (GCCs) in emerging Tier 2 cities. GCCs, which serve as offshore centers for multinational companies, are recognized as key drivers of growth within India's services sector. This initiative reflects the government's strategic effort to diversify economic development beyond major metropolitan areas and to tap into the potential of smaller cities. The framework will provide guidance to states, suggesting measures to improve the availability of talent and infrastructure, streamline byelaw reforms, and foster collaboration with industry stakeholders. The significance of GCCs in India is undeniable, with these centers occupying over one-third of all occupied Grade A office stock in the country and accounting for over 50% of global real estate demand from GCCs. By promoting the growth of GCCs in Tier 2 cities, the government aims to create new employment opportunities, attract foreign investment, and stimulate economic growth in these regions.
The combined initiatives of SWAMIH Fund 2 and the framework for GCCs in Tier 2 cities reflect a comprehensive approach to fostering economic growth and addressing critical challenges in the Indian economy. SWAMIH Fund 2 tackles the immediate problem of stalled housing projects, providing relief to homebuyers and stimulating the real estate sector. The framework for GCCs in Tier 2 cities promotes long-term sustainable growth by diversifying economic activity and creating new opportunities in less developed regions. Both initiatives demonstrate a commitment to inclusive growth, ensuring that the benefits of economic progress reach a wider segment of the population. The success of these initiatives will depend on effective implementation and collaboration among various stakeholders, including the government, banks, private investors, developers, and local authorities. The long-term impact will be a more stable and prosperous economy, with a better distribution of wealth and opportunities across the nation. The government's commitment to addressing both immediate challenges and long-term development objectives is a positive signal for investors and businesses, and reflects a forward-looking vision for the future of India's economy.