Govern­ment needs to im­ple­ment ef­fec­tive pol­icy for af­ford­able hous­ing: CBRE

Accommodation Times - - .. Housing Finance.. -

Al­though the In­terim Budget an­nounce­ment sup­port­ing af­ford­able hous­ing was wel­comed by the real es­tate in­dus­try, the seg­ment has a long way ahead as yet. To be­gin with, there is con­sid­er­able sup­ply short­age in this arena pegged at 18.78 mil­lion for the 12th Five Year Plan (2012–2017) by the Min­istry of Hous­ing and Ur­ban Poverty Al­le­vi­a­tion Min­istry (HUPA),of which 96% is in the EWS and LIG cat­e­gories. Hous­ing short­age for the EWS stands at al­most 11 mil­lion homes, while that for LIG stands at 7.41 mil­lion homes. Fairly re­cently, the govern­ment had set up a com­mit­tee to de­velop a slum in­dex at the city, state and na­tional lev­els to sharpen its pol­icy fo­cus on the ur­ban poor. Slum data (source: HUPA) re­leased in March 2013 for Cen­sus 2011 had pointed out that around one out of ev­ery six house­holds in ur­ban In­dia (17.4%) lived in a slum. It had also shown that well over a third of all slum house­holds (38%) were in cities with a pop­u­la­tion in ex­cess of a mil­lion.

A key push was given to the hous­ing sec­tor, with the al­lo­ca­tion of INR 6,000 crore for the Ru­ral Hous­ing Fund, and INR 2,000 crore for the Ur­ban Hous­ing Fund, at the In­terim Budget 2014–15. How­ever, with a sub­stan­tial amount of funds al­ready al­lo­cated for the cre­ation of af­ford­able and/or low-cost, mass hous­ing in the pre­vi­ous fis­cal left un­used, the ef­fec­tive uti­liza­tion of fund al­lo­ca­tion for af­ford­able hous­ing can­not be stressed enough. Ac­cord­ing to HUPA, as of Fe­bru­ary 20, 2013, as against a tar­get of 3.10 lakh ben­e­fi­cia­ries with a to­tal out­lay of INR 1,100 crore, ap­prox­i­mately 13,485 ben­e­fi­cia­ries had been ben­e­fit­ted with a net present value (NPV) of in­ter­est sub­sidy of INR 16 crore. Ad­di­tion­ally, al­though about INR 2,000 crore had al­ready been al­lo­cated to the Ur­ban Hous­ing Fund, the Na­tional Hous­ing Bank (NHB) is yet to set up this fund.

The Cab­i­net Com­mit­tee on Eco­nomic Af­fairs ap­proved the launch of the Ra­jiv Awas Yo­jana (RAY) as a Cen­trally Spon­sored Scheme (CSS) to be im­ple­mented dur­ing 2013–2022. It also ap­proved the con­tin­u­a­tion of Af­ford­able Hous­ing in Part­ner­ship Scheme (AHP) as part of RAY, with amend­ments. It was de­cided to con­tinue the In­ter­est Sub­sidy Scheme (ISS) for Hous­ing the Ur­ban Poor (ISHUP) and rechris­ten­ing it as the Ra­jiv Rin­nYo­jana (RRY).

As of Jan­uary 31, 2014, a to­tal of 121 projects had been un­der the prepara­tory as well as im­ple­men­ta­tion phases un­der RAY—across 19 states/union ter­ri­to­ries and 84 towns/cities— at a to­tal project cost of INR 5,010.20 crore for hous­ing and in­fra­struc­ture projects. Of this to­tal ap­proved amount, about INR 462.49 crore have been re­leased for var­i­ous projects, while INR 905.00 crore is yet to be re­leased.

Ear­lier cen­tral as­sis­tance un­der the scheme was limited to INR 50,000 per dwelling unit or 25% of the cost of all civic ser­vices (ex­ter­nal and in­ter­nal), whichever was lower. This as­sis­tance was to be given as sub­sidy for project de­vel­op­ers both in the pri­vate as well as pub­lic sec­tors. As per the rec­om­men­da­tions of the Af­ford­able Hous­ing Task Force ( AHTF), the scheme has been amended to pro­vide INR 75,000 per EWS/LIG dwelling unit for hous­ing and in­ter­nal de­vel­op­ment com­po­nents, with an ob­jec­tive to im­prove pri­vate sec­tor par­tic­i­pa­tion in af­ford­able hous­ing.

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