Huge opportunities for private builders under affordable housing scheme: Venkaiah
New Delhi: Minister for housing and urban poverty alleviation (HUPA) M. Venkaiah Naidu on Tuesday called for greater participation of private sector developers in the Centre’s affordable housing for all initiative under the Pradhan Mantri Awas Yojna (PMAY).
There are huge opportunities for the private sector under In-situ Slum Redevelopment (ISSR) and Affordable Housing, Naidu said at a conference on the real estate sector, organized by the PHD Chamber of Commerce and Industry.
The minister also directed the HUPA secretary Nandita Chatterjee to convene a round-table with developer bodies, banks and housing finance companies and others concerned to deliberate upon the reasons for no private sector participation under PMAY (Urban) so far and the road ahead in the ‘new eco-system of opportunities’.
The round-table would also discuss ways to improvise components of PMAY (Urban) to encourage private sector participation and suggest business models to ensure that the goal of ensuing ‘Housing for All by 2022’ is met.
According to the revised demand assessment, as reported by the states and union territories, over 15 million affordable houses need to be built for the economically weaker sections and low income groups in urban areas, the minister said.
Naidu said the government has so far approved construction of over 16 lakh affordable houses under PMAY (urban). The construction of the houses will have an investment of about Rs90,000 crore for which central assistance of about Rs25,000 crore has been approved.
“I am rather disappointed that not a single proposal has come from private builders so far even though PMAY (Urban) has been designed envisaging a big role for private sector,” the minister said.
“For a long time, you have been demanding infrastructure status for housing sector. Keeping faith in me, you wanted and expected me to take up with the government,” added Naidu.
Private developers had been demanding infrastructure status for the housing sector, which was addressed in the Budget 2017-18. Finance minister Arun Jaitley in his Budget speech for 2017-18 on 1 February announced infrastructure status for affordable housing that would enable these projects to avail the associated benefits.
“Now, developers have no more excuses to keep on dithering about promoting affordable housing in a big way...Affordable housing sector is the way forward and the hope for developers as it now covers people with incomes of up to Rs18 lakh per year, which is very substantial in our context,” Naidu said.
The Budget 2017-18 allocated Rs23,000 crore and Rs6,042.81 crore to PMAY for rural and urban areas, respectively. The share of PMAY (rural) increased by 53% from the previous budget allocation. The government had set aside Rs15,000 crore for rural housing under the PMAY scheme in the Budget 2016-17.
Naidu said the government is providing a huge opportunity for developers at the ‘bottom and middle of the pyramid’–i.e. housing for rural and urban poor, and middle income groups. “The opportunity is knocking at the door. Now, it is for developers to rise to the occasion post Infrastructure status, Real Estate Act and Remonetisation”, he added.
Naidu also said that the Real Estate (Regulation and Development) Act, 2016 seeks to restore the character of the real estate sector, urging the states to not deviate and dilute the rules of the Act.