In a bid to give a boost to affordable housing, the government today announced a new PPP (Public Private Partnership) policy for this segment that allows extending Central assistance of up to Rs 2.50 lakh per house to be built by private builders even on private land. This will also open up immense potential for private investments in affordable housing projects on the government land in urban areas. The policy, which was announced by Minister of Housing & Urban Affairs Hardeep Singh Puri, gives eight PPP options to the private sector to invest in the affordable housing segment.
Addressing the ‘Real Estate & Infrastructure Investors Summit-2017′, organized by NAREDCO in Mumbai, Puri explained that this policy seeks to assign risks among the government, developers and financial institutions, to those who can manage them the best besides leveraging under utilized and un-utilized private and public land towards meeting the Housing for All target by 2022.
The two PPP models for private investments in affordable housing on private lands include extending Central assistance of about Rs 2.50 lakh per house as interest subsidy on bank loans as upfront payment under the Credit Linked Subsidy Component (CLSS) component of Pradhan Mantri Awas yojana (Urban). Under the second option, Central assistance of Rs 1.50 lakh per house to be built on private lands would be provided, in case the beneficiaries do not intend to take bank loans.
Puri stated that eight PPP options, including six for promoting affordable housing with private investments using government lands, have been evolved after extensive consultations with States, promoter bodies and other stakeholders. Under these six government land-based PPP models, beneficiaries can avail Central assistance of Rs 1.00 to Rs 2.50 lakh per house as provisioned under different components of PMAY(Urban). Beneficiaries will be identified as per the norms of PMAY(Urban).
Puri also expressed concern over the private sector so far not entering the affordable housing segment despite huge scope for the same under the Pradhan Mantri Awas Yojana (Urban) and an enabling eco-system put in place through several concessions and incentives offered, including the grant of infrastructure status for this segment.