The Union government on Wednesday gave its approval for the launch of its ambitious 'Housing for All' scheme and fleshed out details on slum rehabilitation, promotion of affordable housing through public private partnership (PPP) and credit linked subsidy for the weaker section under it.
Under the scheme, the government will take up slum rehabilitation projects with participation from private developers using land as a resource. The centre will grant Rs 1 lakh per house and the state government will have the flexibility in deploying it to any slum rehabilitation project to provide houses to slum dwellers.
Under credit linked interest subsidy, the government has proposed an interest subsidy of 6.5 per cent on housing loans availed up to a tenure of 15 years for economically weaker section (EWS) and low income group (LIG). The subsidy pay-out is expected to be Rs 2.3 lakh per house on NPV basis for both the categories.
This scheme is applicable across all statutory towns from the very beginning.
“This is a buoyant move that can uplift the sector dogged by sky-high interest rates and rising debt. Private players will surely like to take the affordable housing segment seriously thanks to greater clarity in the policy. The government's move to increase availability of homes at affordable price points will save our cities from harbouring slums,” said Sachin Sandhir, global managing director – emerging business, RICS.
The government will also extend support at the rate of Rs1.5 lakh per house for EWS category for individual house construction or enhancement. State government or state housing boards can take up project of affordable housing to avail the central government grant.
The government has proposed certain mandatory reforms to free up urban land market and make adequate urban land available for the housing scheme.
The scheme will cover the entire urban area consisting of 4,041 statutory towns with initial focus on 500 Class I cities and it will be implemented in three phases.
Sanjay Dutt, executive managing director- South Asia, Cushman & Wakefield said while the focus is primarily on the urban areas and the 500 Class I cities, constraints particularly with respect to how the existing infrastructure would need to be reinforced would have to be given equal thought.
As of now, the estimated number of houses is 2 crore but the government expects to reach a more concrete number based on demand assessment through Jan Dhan Yojana, Aadhar, etc.
It also plans to launch a technology sub-mission under Housing for All which will facilitate adoption of modern, innovative and green technologies and building material for faster and quality construction of houses.
“Overall, the approach seems to be headed in the right direction, however, the implementation needs to expand and adopt a more holistic vision that situates the affordable housing within larger issues of urbanization, in order to achieve a sustainable long-term solution,” said Dutt of Cushman and Wakefield.