Budget 2025: SWAMIH Fund 2.0

Posted On - 3 March, 2025 • By - Clayon Lopes

Introduction

The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman on February 1, introduced significant measures to strengthen the real estate sector. One of the standout initiatives is the launch of SWAMIH Fund 2.0, a ₹15,000 crore blended finance facility aimed at accelerating the completion of one lakh housing units stuck in incomplete projects. Building on the success of the first SWAMIH Fund, which has already delivered 50,000 homes and aims to complete another 40,000 by 2025, this second phase reflects the government’s sustained commitment to resolving issues in the real estate sector.

Objective

SWAMIH Fund 2.0 has been designed as a last-mile financing solution to address the crisis of stalled housing projects. By injecting much-needed liquidity into incomplete developments, the fund seeks to revive projects that are currently burdened with legal disputes, non-performing asset (NPA) classifications, or financially weak developers.

Beyond providing financial relief to individual homeowners, the fund is also intended to restore confidence in the real estate market. It aims to ensure that previously stalled developments are not only completed but also made available for sale, thereby improving collections, increasing supply in the affordable and mid-income housing segments, and revitalizing the overall property sector. The Ministry of Finance’s backing reinforces the credibility and efficiency of the program, which is managed by one of the largest domestic real estate private equity teams.[1]

Benefits

The introduction of SWAMIH Fund 2.0 brings multifaceted benefits to various stakeholders within the real estate ecosystem:[2]

  1. Relief for Homebuyers: Homeowners who have been waiting for years for their homes to be delivered will finally see stalled projects come to completion. This initiative reduces financial stress for these individuals and helps restore trust in the real estate sector.
  2. Support for Real Estate Developers: Developers struggling with liquidity constraints will have access to critical funds, enabling them to resume construction and fulfill their commitments to buyers.
  3. Stability for Financial Institutions: By resolving issues related to stalled housing projects, the fund will help reduce the burden of bad loans on banks and NBFCs, thus strengthening the financial sector’s stability.
  4. Boost for Construction and Allied Industries: The revival of real estate projects will generate demand for construction materials such as steel and cement, while also creating jobs for labourers and allied professionals, stimulating economic activity.
  5. Encouragement for Future Investments: The initiative demonstrates the government’s proactive approach to addressing real estate challenges, making the sector more attractive to both domestic and international investors.

Opinion

While SWAMIH Fund 2.0 is a commendable initiative, however, its long-term success will depend on efficient implementation, transparency, and accountability in fund allocation. The key challenge remains the timely identification of projects that genuinely require intervention and ensuring that the allocated funds are not misused by developers. A robust monitoring mechanism will be essential to maximize the fund’s impact.

Additionally, while the fund provides a much-needed short-term solution, it is crucial for the government to focus on long-term policy reforms that prevent such crises from arising in the future. Measures such as stricter project completion timelines, enhanced financial discipline among developers, and improved regulatory oversight can help create a more resilient real estate sector.

Conclusion

SWAMIH Fund 2.0 has the potential to be a game-changer for the Indian real estate market. By addressing the issue of stalled housing projects, it not only provides immediate relief to homebuyers and developers but also contributes to broader economic stability. The initiative will help rebuild trust in the real estate sector, stimulate job creation, and bolster financial institutions. While the government’s proactive approach is commendable, ensuring effective implementation and reinforcing structural reforms will be crucial to the fund’s long-term success. By combining financial intervention with regulatory improvements, India can create a more robust and sustainable housing sector for the future.

[1] Budget 2025: What is SWAMIH Fund 2 scheme, how will it benefit middle-class families? | Mint

[2] Budget 2025: FM Sitharaman announces allocation of Rs 15,000 crore for SWAMIH fund 2.0 for completion of 1 lakh units – Budget 2025 News | The Financial Express