In an attempt to support affordable housing, the government has already provided infrastructure status and now it’s considering to tweak the land use policy in order to meet the deadline for the project deliverance. Modi government now plans to allow a vast portion of surplus land belonging to sick public sector undertakings (PSUs) for building low-cost homes in urban areas.
A calculation, initiating this decision measures that more than 1 lac homes- of around 800 sq ft each- can be built on land with just 8 PSUs of about 2500 acres. “Housing for All by 2022” aims to develop 1.2 million homes. These PSUs include sick industrial companies such as- HMT Bearings in Hyderabad, Hindustan Antibiotics in Pune, Heavy Engineering Corporation in Ranchi, Indian Drugs and Pharmaceuticals in Gurgaon and HMT Watches in Nainital which are nearing to be closed down.
Reportedly, the cabinet will float tenders for the same in the next couple of weeks by the department of public enterprises. The state-run NBCC which is likely to be appointed as the land management agency for suffering PSUs will help in selling the land parcel. The profit from this land selling will be used to clear up their outstanding liabilities and implement of voluntary retirement schemes prior to the closing or privatization of the enterprises. Also, the unsold lands will be either auctioned by the government or used for affordable housing construction.
Earlier, in September the Ministry of Housing and Urban Affairs had given a hint about this move. After the announcement, it has induced eight public-private options, together with 6 for promoting affordable housing using government lands. Under this model, the public authority will make the payment of such buildings based on the progress on of the project as per lay down and buyers will be paying their part of the cost of the housing to the government. The government targets to deliver as much as low-budget flats before the general elections early in 2019.
The government has an ambitious target to develop as many as 12 lac projects under Pradhan Mantri Awas Yojana (Urban) PMAY-U, under which the urban dwellers with an annual income up to Rs. 18 lacs will get interest subsidy up to 4% on their borrowed housing loans up to Rs. 12 lacs. Of the approved 30.76 lac homes, 15.66 lac houses are under construction, while only 4.13 lac have been constructed since the introduction of this scheme. These affordable homes are set to bridge the gap between the demand and supply disparity in the urban areas. With the limited availability of land and its towering price, it is the biggest challenge for the private developers to deliver a quality house within a limited budget. This scheme gives a relief up to Rs. 1.5 lacs per EWS occupancy with an interest subsidy of 6.5% on home loans up to Rs. 6 lacs.
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