Centre exploring charitable funding, revival fund to boost affordable housing and stalled projects

Housing and Urban Affairs Minister Manohar Lal Khattar on Saturday said the Centre will encourage proposals to set up charitable institutions to fund housing, especially in the affordable segment, as banks and traditional financial institutions have been reluctant to finance such projects. Addressing the second day of the NAREDCO Conclave 2026, the minister outlined a multi-pronged approach aimed at reviving stalled projects, accelerating affordable housing, and unlocking underutilised urban land.

Khattar said affordable housing, particularly for the economically weaker sections (EWS) and low-income groups (LIG), continues to face a funding gap. “Banks and other financial entities do not proactively come forward to fund housing units in the affordable segment. To bridge this gap, the ministry will encourage proposals for setting up charitable institutions that can mobilise funds for this purpose,” he said.

He added that such institutions could pool resources through corporate social responsibility (CSR) contributions to support housing for poorer sections of society. According to Khattar, this model could supplement existing government schemes and provide a dedicated funding channel for segments that remain underserved by formal finance.

The minister also indicated that the government is considering the creation of a committed fund to finance stalled housing projects that were approved before the implementation of the Real Estate (Regulation and Development) Act (RERA). “There are wider and broader suggestions from the industry that a dedicated fund could help both promoters and homebuyers reach a win-win settlement in pre-RERA stalled projects,” he said.

During discussions at the conclave, NAREDCO proposed the creation of a government-backed fund of around ₹2.5 lakh crore to support the revival of stalled housing projects. Khattar said the size and structure of such a fund could be debated, but acknowledged that access to timely financing remains critical to restarting incomplete developments.

On urban redevelopment, Khattar said the government plans to develop nearly 700–750 slum settlements in and around the National Capital Territory (NCT). He noted that a policy framework for this initiative is currently being deliberated at a high level among various government authorities and stakeholders. “Once this proposal takes off, affordable housing will receive a significant fillip in and around the NCT,” he said.

Addressing concerns around land availability, the minister ruled out the possibility of providing cheaper land exclusively for affordable housing. Instead, he suggested that land availability could be encouraged through cross-subsidisation, provided a broad consensus emerges among stakeholders.

Earlier, Kuldip Narayan, Joint Secretary in the Ministry of Housing and Urban Affairs, highlighted the potential of redeveloping underutilised land within city centres. He said several land parcels with empty or unused buildings have remained idle for decades and could be identified using tools such as Google Maps. “Such land can be brought into productive use for housing projects,” he said. Narayan also noted that the government is examining rental housing models and that clarity will emerge once detailed feasibility studies are completed.

NAREDCO Chairman Dr Niranjan Hiranandani said the government has made significant efforts to prioritise housing in the Indian economy, but stressed that more needs to be done. “If India is to become a Viksit Bharat, the contribution of the housing sector must rise to 15% of GDP by 2047,” he said. He also called for faster policy decisions to promote rental housing on economies-of-scale lines, which would benefit those unable to afford home ownership.

At the event, NAREDCO President Parveen Jain and Minister Khattar released a joint KPMG-NAREDCO knowledge report outlining a detailed roadmap for the real estate sector in line with the vision of “Viksit Bharat”.