The UPA government is working on a major stimulus for Indias flagging real estate market and ancillary industries through a nationwide scheme of affordable housing. The initial plan is to build 100,000 dwelling units,each costing Rs 10-20 lakh,over the next two years.
The scheme,brainchild of the Department of Industrial Policy and Promotion,has the drawing-board title of ‘100 R K Puram Project’. It aims to tap into the huge unmet demand of MIG/LIG housing costing not more than Rs 40 lakh per unit among government and PSU employees,currently incentivised by surplus cash from revised payscales and arrears,and single-digit loan rates charged by government banks.
R K Puram,in south-west Delhi,is Asias largest colony of government employees. According to the Department of Industry note,the push to housing is expected to translate into increased production of steel,cement,trucks,tiles,fittings,etc.
Official sources said Cabinet Secretary K M Chandrasekhar discussed the proposal in a meeting with state chief secretaries on January 31.
The scheme has been discussed with real estate majors including DLF and Unitech.
It was expected to find mention in the interim budget,but it is learnt Finance Minister Pranab Mukherjee decided otherwise.
The government is currently working on three options:
* Developers with large landbanks of their own can come out with affordable housing (Rs 12-20 lakh) with state governments helping them with increased FSI to protect their bottomlines. The idea has been discussed with major real estate developers.
* States can give land to developers at concessional rates with caps on size and cost of the unit.
* States can announce their own housing schemes with land being made available to development authorities or cooperative housing societies on a no-profit,no-loss basis.