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New Delhi: The Union Cabinet on Wednesday cleared a ‘Housing for all by 2022’ scheme for urban areas, aiming to provide nearly 20 million affordable homes to the poor in the next seven years.

The proposal, cleared at a cabinet meeting chaired by Prime Minister Narendra Modi on Wednesday morning, was a key pledge of the Bharatiya Janata Party (BJP) in the runup to the 2014 general election.

The scheme envisages rehabilitation of slum dwellers with the participation of private developers, using land as a resource; promotion of affordable housing for weaker sections through credit linked subsidy; affordable housing in partnership with public and private sectors; and subsidy for beneficiary-led individual house construction or enhancement.

According to an official statement, a central grant of 1 lakh per house, on an average, will be available under the slum rehabilitation programme. But state governments would have flexibility in using this grant for any slum rehabilitation project taken for development using land as a resource for providing houses to slum dwellers.

The scheme is mainly expected to benefit economically weaker sections (EWS) and low-income groups (LIG).

“Under the credit linked interest subsidy component, interest subsidy of 6.5% on housing loans availed upto a tenure of 15 years will be provided to EWS/LIG categories, wherein the subsidy pay-out on NPV basis would be about 2.3 lakh per house for both the categories. Central assistance at the rate of 1.5 lakh per house for EWS category will be provided under the affordable housing in partnership and beneficiary-led individual house construction or enhancement," the government said.

Telecom minister Ravi Shankar Prasad told reporters that the scheme will be implemented as a Centrally Sponsored Scheme, except the credit linked subsidy component, which will be implemented as a Central Sector Scheme.

He, however, clarified that the proposal cleared by the cabinet on Wednesday only deals with urban areas and that the rural component would be introduced later.

Homes constructed under the mission would be allotted in the name of the female head of the households or in the joint name of the male head of the household and his wife.

The scheme will cover the entire urban area, consisting of 4,041 statutory towns across India with the initial focus on 500 Class I cities. It will be implemented in three phases. Phase-I (April 2015-March 2017) will cover around 100 cities selected from states and union territories as per their willingness. Phase-II (April 2017-March 2019) will cover 200 cities and Phase-III (April 2019-March 2022) will cover the remaining cities.

Giving further details, the government said that the “dimension of the task at present is estimated at 2 crore" but the exact number of homes would depend on the assessments carried out by all the states.

A technology sub-mission will be set up to help the scheme adopt modern, innovative and green technologies and to use building material for faster and quality construction of houses. It will assist states deploy disaster resistant and environment friendly technologies. It will also coordinate with other agencies working on green and energy efficient technologies and on climate change.

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