New Delhi: The Union cabinet on Tuesday approved the creation of a Rs60,000-crore National Urban Housing Fund to finance the government’s Housing for All programme, which aims to build 12 million affordable housing units in urban areas by 2022.
The newly created fund will be placed under the aegis of the Building Materials and Technology Promotion Council, an autonomous body under the ministry of housing and urban affairs, whose primary task is the mainstreaming of new construction technologies.
The fund will be raised from non-budgetary sources and could tap into existing government entities such as the Housing and Urban Development Corp. (Hudco).
Finance minister Arun Jaitley had proposed the creation of such a fund in his budget speech and said that 3.7 million homes would be built in urban areas in 2018-19 and 5.1 million in rural areas.
For this fiscal year, the budget proposes to raise Rs25,000 crore as extra-budgetary support in order to finance housing programmes under the Pradhan Mantri Awas Yojana (PMAY). The urban component of the flagship scheme targets more than 4,300 cities and towns.
In a recent press interaction, minister for housing and urban affairs Hardeep Puri had said: “We were actually a little worried because more than 3.7 million houses have been approved under PMAY till January 2018, but the government has announced plans to set up a dedicated fund and we are confident we can build these houses."
The budgetary support for the urban housing scheme was Rs6,505 crore for 2018-19, which was inadequate to meet commitments and scale up the programme, officials in the ministry said, requesting anonymity.
On an average, the urban affairs ministry has been sanctioning 2-3 lakh houses every month, based on proposals received from the states and Union territories.
The newly created fund is expected to raise the requisite funds as per requirement for the next four years and plug any budgetary shortfalls. The projected overall funding envisaged by the government is around Rs1.7 lakh crore.
Out of the proposed 12 million houses, about 0.5 million have been completed and a further 1.7 million houses have been launched, a government press release stated.
Besides direct support for house construction, more than 87,000 interest subsidy applications for housing loans have been sanctioned and another 40,000 are currently being processed.
Under the scheme, each beneficiary gets financial assistance worth Rs1.5 lakh to support the construction of an affordable housing unit. In case of in-situ development of houses replacing slums, each beneficiary gets Rs1 lakh. The government has also launched a sub-component of the scheme which targets middle income groups by providing Rs2.5 lakh to Rs2.7 lakh as interest subsidy