Govt to pay rent for urban poor in 100 smart cities

NEW DELHI: The Narendra Modi government may now pay your rent. The Centre is all set to roll out a Rs 2,700-crore welfare scheme in 100 smart cities to give rent vouchers to the urban poor. The government would launch the new rental housing policy with the rent vouchers for below poverty line (BPL) families. Though the policy has been in the works for three years, the first component is likely to be rolled out in 2017-18 financial year in the smart cities.

The scheme is expected to cost Rs 2,713 crore every year to implement in smart cities. Aimed directly at the urban poor and helping the migrant population, the scheme would involve distribution of rent vouchers by urban local bodies. The tenant would give these vouchers to the landowner, who in turn would be able to redeem them at any citizen service bureau. If the rent is higher than the value of rent voucher, the tenant would pay the difference in cash to the landowner.

The value of rent voucher would be determined by the urban local body on the basis of class or size of the dwelling unit and the prevalent rent in the city. The government is also exploring the option of direct benefit transfer in this voucher scheme. According to Census 2011, about 27.5% of urban residents lived in rented houses in 2011.

However, National Sample Survey (NSS) found that around 35% of urban households lived on rent in 2009. Moreover, according to NSS this proportion has remained steady since 1991. A senior official of housing and urban poverty alleviation ministry told ET, “The rental voucher scheme is being looked at as a means to complement the Prime Minister Housing for All scheme.”

The government would also monetise the confiscated benami properties for construction of affordable homes to address the housing shortage.

“The recent implementation of the Benami Properties Act and rules open up another option for rental housing. An enabling provision would be inserted in the rules that houses confiscated by Central government which cannot be auctioned, could be let out by the Central government or through state governments as rental housing for the middle income group (MIG), LIG and economically weaker section (EWS) depending on the suitability and location of such properties,” the official said.

The ministry would now prepare a Cabinet note to push the rental voucher scheme. The move comes close to a recommendation by a group of secretaries on health, sanitation and urban development formed by Prime Minister Narendra Modi.

Credits ET Realty

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