The Union Cabinet recently gave its approval to the ambitious “Housing for All by 2022” scheme under which people from the low-income group can avail of loans at a much reduced rate of 6.50%. After the approval, the Central Government launched the “Housing for All by 2022” mission to give a major boost to affordable homes for the urban poor and low-income groups. The Cabinet, at a meeting chaired by the Prime Minister, accepted the recommendations of inter-ministerial committee to increase interest subvention to 6.50% on housing loans to beneficiaries of the economically weaker sections, including slum dwellers, and low-income groups. The Urban poor will thus benefit by around Rs.2.3 lakhs each, and their EMI will be reduced by Rs.2,852/- per month.
According to a Senior Official, “at present, with the interest rate of 10.50%, current EMI on admissible loan component of Rs.6 lakh, over 15 year loan duration works out to Rs.6,632 per month. With cabinet deciding on credit-linked subsidy to 6.5%, EMI comes down to Rs.4,050/- per month, thus giving a benefit of Rs.2,582/- per month to the urban poor.”
As a part of the National Urban Housing Mission in urban areas, the government would seek to provide central assistance in the range of Rs.1 lakh to Rs.2.3 lakhs per beneficiary under different component to build 2 crore new houses to meet the housing shortage, over the next 7 years. There are four components to the National Urban Housing Mission.
As for the redevelopment plan of slums with the participation of private developers using land as a resource component, the central government grant would be Rs.1 lakh on an average per beneficiary, while the State/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.
Additionally for affordable housing through credit-linked subsidy scheme, an interest subsidy of 6.50% on each housing loan to Economically weaker sections and LIG beneficiaries would be provided by the Central Government. Under third component of affordable housing in partnership with private and public sectors, the Central Government’s assistance of Rs.1.50 lakhs to each beneficiary would be provided to promote housing stock for urban poor with the involvement of private and public sectors, provided 35% of dwelling units of the projects proposed are earmarked for Economically weaker sections category. Lastly, as part of subsidy for individual beneficiary-led construction or enhancement of houses, the Central Government’s assistance of Rs.1.50 lakhs would be provided to each eligible urban poor beneficiary to enable him built 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% of urban population. 100 such cities will be included in Phase-1 (April 2015 – March 2017) and 200 cities in Phase-2 (April 2017 – March 2019) and the remaining would be covered during 2019-2022.