No abuse of affordable housing ensured by government

Safeguards are being built by finance ministry to ensure that the real estate companies don’t misuse the external commercial borrowing which was announced in the budget recently diverting money. For implementation of business announcements modalities were taken care of and being worked out, a senior official told this to business standard. These are said to specify the real estate projects and the developers who are being given permission for utilising this facility of ECB. For power, airlines, roads the way has been cleared by the implementation of ECB by the finance ministry. In the next two week the go-head is expected for the affordable housing section. As a general rule the ECB is not allowed in real estate sector. But the recent budget it was given green flag for the low costing affordable housing projects. By this the cost of borrowing will become lower for this segment. However some guidelines will be structured to ensure transparency. To check that ECB funds go in the right direction that is for affordable housing and not elsewhere, an escrow account may be made compulsory. Access to foreign lender may be restricted for the small scale developers. It is likely that ECB will be routed via central mechanism.