Ministry of Finance Current Affairs - 2019

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Finance Minister: Rs 25,000 crore Fund for stuck Housing Projects

On November 7, 2019, Government of India announced the establishment of Rs 25,000 crore fund for home buyers whose money is stuck in stalled projects. According to the Ministry of Finance, there are over 1600 such projects comprising of 4.58 lakh housing units across the country. The “Special Window” will prioritize debt financing in the Affordable and middle-income housing sector.

About the fund

  • Rs 10,000 crore is to be provided by GoI towards the fund. Other firms like LIC and SBI along with sovereign wealth funds and pension funds will contribute Rs 15,000 crore
  • The fund is to be set up as Category II Alternate Investment Fund.
  • The fund is to be registered with SEBI as an escrow account.

Highlights

  • Under the special window, the projects that have been declared as NPAs (Non Performing Assets) and other projects that are undergoing insolvency at NCLT are also allowed to be kick started

Significance

  • The fund infusion will help provide employment to workers and also help restore trust between buyers and developers
  • Reviving housing sector will increase demand for cement and iron and steel industries that will generate more employment
  • The special window will help releasing the stress in other major sectors of the Economy

CEA Krishnamurthy Subramanian appointed part-time member in IBBI

Krishnamurthy Subramanian, Chief Economic Adviser (CEA) and B. Sriram, former managing director (MD) and chief executive officer (CEO) of Industrial Development Bank of India (IDBI Bank) were appointed part-time members of Insolvency and Bankruptcy Board of India (IBBI).

K Subramanian, an Indian School of Business (ISB) Hyderabad professor was appointed chief economic adviser for a period of 3 years in December 2018.

Their appointment was approved by Appointments Committee of the Cabinet (ACC), which is composed of Prime Minister of India (who is Chairman), Union Minister of Home Affairs and the order for appointment was issued by Department of Personnel and Training (DoPT).

About Insolvency and Bankruptcy Board of India

  • IBBI, an insolvency regulatory agency was established on 1 October 2016. It was given statutory powers by Insolvency and Bankruptcy Code (IBC), the bankruptcy law of India which was passed by Lok Sabha on 5 May 2016.
  • The IBC 2016 established Insolvency and Bankruptcy Board of India (IBBI), to oversee insolvency proceedings in India and to regulate entities registered under it.
  • The IBBI Governing Board consists of 10 members, including representatives from the Ministry of Finance (MoF), Ministry of Law and Justice, Ministry of corporate affairs (MCA), and Reserve Bank of India (RBI).
  • IBBI act as a regulator for overseeing insolvency proceedings and entities such as Insolvency Professionals (IP), Insolvency Professional Agencies (IPA) and Information Utilities (IU) in India.
  • IBC covers Individuals, Companies, Partnership firms and Limited Liability Partnerships and handles cases under it using tribunals namely National company law tribunal (NCLT) and Debt recovery tribunal (DRT).