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‘Affordable houses’ to special categories
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The Ministry of Housing and Urban Poverty Alleviation has come out with the new policy, which is likely to change the housing scene in our towns and cities.
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The new policy:‘Affordable housing for all’ is the new motto.
The much-awaited new policy for the SC, ST, OBC, weaker sections and women has been placed before Parliament. It aims to ensure that private builders and developers make room for the urban poor in their housing projects through cross-subsidisation and more floor area ratio to developers. It is estimated that the urban poor, who will be over 80 million, have not found a place in the master planning processes.
The salient features of the new policy are: the policy plank is “affordable housing for all,” instead of “shelter for all” as hitherto. As against the 1998 Housing and Habitat Policy which had only a peripheral mention of the housing needs for women and weaker sections, there is now a specific thrust for this sector. Ten to 15 per cent of every land developed for housing by any agency or apartment complex will have to be set apart for the specified category.
•20-25 per cent of the Floor Area Ratio (FAR), where applicable, will also have to be reserved.
•Interest subsidy of 5-6 per cent will be extended to the specified groups for all loans.
•The policy will be forwarded to State Governments for implementation. A Central Monitoring Committee will be set up to oversee the action plan. State Governments will set up similar committees.
As per the estimate made in 1997 (based on which the 1998 Habitat Policy was framed) the requirement was 1366 million housing units, 75 per cent of which was to be in urban areas. The present estimate is about 24.7 million units at the end of the 10th Five Year plan and 99 per cent of which pertains to economically weaker sections and low income groups.
A major emphasis is on urban planning, increased supply of land for housing to the specified segment, transferable development rights, increased flow of funds and the like.
Partnership
The estimated fund to bridge the deficit is around Rs. 1,51,000 crore, and only 25 per cent of this is expected to be met by banks, financial institutions, Central and State Governments. As such, the thrust will be on private real estate agencies.
Private sector will be allowed land assembly within the Master Plans and action plans will be drawn up for urban slum dwellers. A special package will be offered to housing cooperative societies. Entrepreneurs setting up industries will be required to provide houses to their employees without fail. Similarly, corporates will be asked to provide housing facilities to its employees as near to the place of work as possible. Even service providers such as housemaids, guards, attendants, sweepers and vendors, who at present encroach public land, will have to be provided with quarters. This is intended to achieve the objectives of providing housing to these poor sections of the urban society and prevent mushrooming of slums in urban areas.
Tax breaks
Concessions are to be allowed for house building and finance companies through tax breaks for investments in bonds of HUDCO, and National Housing Bank. HUDCO will be allowed to raise resources through tax-free bonds. Tax relief for investments up to Rs. 20,000 per year are also provided for. Concessions to companies investing in rental housing and service apartments are also included for the concessions. There is also a proviso for reducing stamp duty on documentation, which now ranges from eight to 12 per cent, to a level of four per cent. Even registration charges may be considered for reduction by the respective State Governments.
In a nutshell…
The new policy needs to be appreciated from the angle of social security and uplift of the urban poor. It would be ideal if economic criteria is the main consideration, as caste-based planning may have political connotations. Further, there are rich people among slum dwellers in places such as Mumbai who may corner a good share of the facilities under the new policy. Again, this may invite increasing demand from other communities for inclusion in SC/ST category, like the demand of Gujjars in Rajasthan. Again, the benefits and increased standard of life in urban areas will encourage migration of these people to urban areas and increase the already existing pressure on infrastructure in cities and towns.
Well-meaning plans and policies many a times fail due to minor loopholes. The other difficulty may be from the point of view of income to State Governments from stamp duty and registration charges which they may be reluctant to reduce unless they are compensated.
Even banks and financing institutions may find it difficult to accommodate lending under the scheme as the priority sector benchmarks might have been fulfilled already. To top it all, builders and promoters may be reluctant to take up housing projects under this policy, as their profit margins may be eroded by setting apart the notified portion. The last straw can be that the general category people may be reluctant to buy bigger houses in the same townships where reserved category houses also come up, curtailing the luxurious and ‘Class’ facilities to them.
All said and done, the policy looks to be a laudable and progressive initiative to change the face of our urban landscape.
K. SUKUMARAN
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