Builders called upon to take up affordable housing

NEW DELHI:Union minister for housing Venkaiah Naidu on Tuesday said not a single proposal has come from private builders under Pradhan Mantri Awas Yojana (Urban) and urged developers to rise to the occasion and take up affordable housing in a big way. Expressing his disappointment, Naidu said, “Not a single proposal has come from private builders so far even though PMAY (Urban) has been designed envisaging a big role for private sector.”

The minister of Housing and Urban Poverty Alleviation (HUPA) also directed the ministry to convene a round table with all the developers bodies, banks and housing finance companies and others concerned to deliberate in detail why there has been no private sector participation under PMAY(Urban) so far.

“I would expect this round table to come out with appropriate business models so that the goal of ensuing Housing for All by 2022 is met,” Naidu said. Private sector can participate in PMAY (Urban) mission under in-situ slum redevelopment (ISSR) and affordable housing in partnership (AHP) models.

ISSR, constituting a major portion of the housing mission in urban areas, is entirely to be taken up by the private sector, using land as a resource. “For each slum unit to be rebuilt, central assistance of up to Rs 1 lakh has been committed by the government to make the projects viable. But you have not come forward so far,” the minister said referring to private developers.

The government has announced a slew of supporting measures to revive real estate sector over the last two years, including announcing the long-awaited infrastructure status for affordable housing in the latest Union Budget. To boost rural and urban housing post demonetisation, prime minister Narendra Modi on December 31, 2016 announced interest subsidy of up to 4% on loans taken in the new year under PMAY.

The government also created two additional categories under PMAY (Urban) for interest subvention. Under this, home loans up to Rs 9 lakh will receive interest subvention of 4% and home loans up to Rs 12 lakh will receive interest subvention of 3%. It announced new scheme for people in rural areas which provides an interest subvention of 3% on loans up to Rs 2 lakh, for construction of new houses, or extension of old houses.

Over 15 million affordable houses need to be built for economically weaker sections and low income groups alone in urban areas, as per government estimate. The government has so far approved construction of over 16 lakh affordable houses under PMAY (Urban), with an investment of about Rs 90,000 crore, with a central assistance of about Rs 25,000 crore.

Credits ET Realty

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