The Government on Wednesday kicked off its ‘Housing for All by 2022’ mission with the Union Cabinet approving a substantial increase in interest relief on loan for the urban poor to promote affordable homes.
On the whole, Central assistance in the range of `1 lakh to `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 seven years.
The Cabinet accepted the recommendations of an Inter-Ministerial Committee to increase interest subvention to 6.50 per cent on housing loans availed up to tenure of 15 years to beneficiaries belonging to economically weaker section (EWS) — including slum- dwellers and low income groups (lIGs).
The Cabinet’s decision is likely to benefit urban poor by an amount of `2.30 lakh each and as a result the monthly EMI would come down to `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 `6 lakh, over 15-year loan duration works out to be `6,632 per month.
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 `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 category, 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 `1.50 lakh to each beneficiary would be provided to promote housing stock for the 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 `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 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 (2015-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.
Registration of houses built under the Mission would either be in the name of women or jointly in the name of wife and husband.