With the recent launch of a no-frills car for Rs 1 lakh by the Tata group, the National Housing Bank (NHB) is attempting a similar feat with a Rs 1-lakh home for Tier-II and Tier-III cities, according to a presentation made by bank chairman & MD S Sridhar to the National Advisory Council.
RBI-owned NHB says such a home would halve the shortfall of housing for low-income segments of society during the 11th Plan period (2007-12). The Rs 1-lakh home (excluding the cost of land) has a plinth area of 25 sq m?it includes a separate kitchen, toilet and multi-purpose room?suitable for urban and semi-rural areas.
More significantly, NHB wants to demonstrate that such low-cost housing is feasible, both technically and financially.
Talking to FE, Sridhar said: ?We are holding talks with real estate developers to go for low-cost housing as I believe that a Rs 1-lakh house is technically feasible. We have evolved a concept in this connection and are trying to convince builders about it. Low-cost housing can become a reality in Tier-II and Tier-III cities.?
NHB?s proposal for an interest subsidy of 5% a year for five years on housing loans from the banking system for the urban poor is under favourable consideration of the ministry of housing & urban poverty alleviation. Such an interest subsidy is estimated at a mere 3% of the total subsidy bill of the government.
The NHB?s project is aimed at bringing home ownership within reach of families with a monthly income of up to Rs 7,300. Some of the cities selected for possible construction of Rs 1-lakh homes are Ahmedabad, Vizag, Nagpur, Bhopal, Patna, Madurai, Indore and Siliguri.
According to Sridhar, these cities were chosen as land is available at affordable rates. Builders say they would look favourably at such a project only if the government provides them land free of cost, he said.