Housing for All by 2022 scheme launched, interest relief for urban poor

New Delhi: Government on Wednesday launched its 'Housing for All by 2022' mission and approved a substantial increase in interest relief on loan for the urban poor to promote affordable homes.

The Union Cabinet chaired by Prime Minister Narendra Modi accepted the recommendations of an Inter-Ministerial Committee to increase interest subvention to 6.50 per cent on housing loans to beneficiaries belonging to economic weaker section (EWS) including slum- dwellers and low income groups (LIGs). The Cabinet's decision benefits urban poor by an amount of Rs 2.30 lakh each and as a result this the monthly EMI would come down to Rs 2,852 per month.

According to a senior Housing and Urban Poverty Department Alleviation official, at present, with the interest rate of 10.50 per cent, current EMI on admissible loan component of Rs 6 lakh, over 15-year loan duration works out to be Rs 6,632 per month. With Cabinet deciding on credit-linked subsidy to 6.50 per cent, EMI comes down to Rs 4,050 per month, benefiting the urban poor by Rs 2,582 per month, he said.

On the whole, central assistance in the range of Rs 1 lakh to Rs 2.30 lakh per beneficiary would be provided under different components of the National Urban Housing Mission in urban areas to build 2 crore new houses to meet the housing shortage, over the next 7 years.

As per the earlier approval of the Union Cabinet, there are four components to the National Urban Housing Mission. Under the redevelopment plan of slums with the participation of private developers using land as a resource component, a central grant of Rs 1 lakh on an average per beneficiary would be provided. States/Union Territories are at liberty to use this grant for any slum redevelopment schemes to be taken up to make such projects viable, if required.

In the second caetgory, affordable housing through credit- linked subsidy scheme, an interest subsidy of 6.50 per cent on each housing loan to EWS and LIG beneficiaries would be provided by the central government.

Under third component of affordable housing in partnership with private and public sectors, central assistance of Rs 1.50 lakh to each beneficiary would be provided to promote housing stock for urban poor with the involvement of private and public sectors, provided 35 per cent of dwelling units of the projects proposed are earmarked for EWS category.

For the fourth category of subsidy for individual beneficiary-led construction or enhancement of houses, a central assistance of Rs 1.50 lakh would be provided to each eligible urban poor beneficiary to enable him build his own house or undertake improvements to existing houses.

The housing stock demand may further increase further to the demand assessment to be made by the states and UTs based on online registration through integration of Adhaar Number of Jan Dhan Yojana accounts. Union Cabinet while broadly approving the urban component of 'Housing for All' scheme on February 19, had desired an Inter-Ministerial Committee to further fine tune the Urban Housing Mission.

The Committee subsequently held a series of meetings before coming out with their recommendations. According to the Cabinet decision, interest subsidy under Affordable Housing through Credit Linked Subsidy component of Urban Housing Mission would increase by Rs 50,000 to Rs 1,10,000 for each beneficiary.

At present, housing loans for affordable housing would be available at only 4 per cent. The Urban Housing Mission will be taken up in all the 4,041 cities and towns. Initially, focus would be on 500 cities and towns with a population of one lakh and above each, as they account for about 75 per cent of urban population.

Hundred such cities will be included in Phase-1 (20015-March, 2017) and 200 cities in Phase-2 (April, 2017-March 2019) and the remaining would be covered during 2019-22. The Credit Linked Subsidy Scheme would however, be implemented in all cities and towns from the current year onwards.

Under the Housing Mission in urban areas, houses of upto 30 sqm carpet area would be built with basic civic infrastructure like water, sewerage, roads, power and telephone lines and social infrastructure such as community centres, parks and play grounds, livelihood centres etc.

States/UTs are given flexibility in this regard to make necessary changes as deemed appropriate by them in consultation with the Central Government. States/UTs are also given the flexibility in appraising and approving the housing projects at their level to enable faster implementation of the scheme.

Registration of houses built under the Mission would either be in the name of women or jointly in the name of wife and husband. In order to provide an enabling environment facilitating construction of houses, especially affordable housing for weaker sections in the country by easing supply-side regulations and administrative constraints, government has proposed certain mandatory provisions to follow by the state governments.

It has suggested states/UTs to do away with permissions for land use conversion if agricultural land is already included in the residential zone in Master Plans. States/UTs have been asked to prepare/amend Master Plans earmarking land for Affordable Housing using innovative methods such as land pooling.

The provisions envisage adoption of the approach of deemed building permissions and layout approvals on the basis of pre-approved layouts and building plans for EWS and LIG. States/UTs are being asked to amend existing rental laws and also for putting in place a mechanism for time-bound clearances for layout approvals and building plans by the urban local bodies.

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