Centre Announces Policy To Promote Private Investment In Affordable Housing

Developers taking up projects under the government’s ‘Housing For All By 2022’ scheme will now get central assistance up to Rs 2.5 lakh for each house even on private land, according to a new policy announced on Thursday.

“This public-private partnership will promote private investment in affordable housing,” Hardeep Singh Puri, the newly appointed Union minister for housing and urban affairs said at the Real Estate & Infrastructure Investors Summit-2017 in Mumbai.

Puri said the policy is designed to assign risks among government, developers and financial institutions other than “leveraging underutilised and un-utilised private and public land parcels to meet the target. He said land is one of the major roadblocks in the government’s efforts to implement affordable housing.

“Land being a state subject, the governments can come up with more models that would help in pushing affordable housing efforts further,” said Puri.

There are eight PPP models under the policy, including two options for private investments on private land parcels. As per the first option, developers will get a central assistance up to Rs 2.50 lakh per unit as interest subsidy on bank loans.

Under the second option, Puri said, a central assistance of Rs 1.50 lakh per house built on private land would be provided if the beneficiaries do not take bank loans.

In the past two years, the government has sanctioned 2.6 million housing units across 2,700 cities and towns at Rs 1.4 lakh crore, said Puri. “Going forward, for the next 18 months, our target is to make about 5.6 lakh units ready.”

Ramesh Nair, country head and CEO of JLL India welcomed the decision and said it a “great step” towards making housing for all.