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‘Housing for all’ Shelter scheme to exclude rental plan

As per the earlier proposal, the Centre was to provide for 75 per cent of the construction cost of rental units.

Written by Shalini Nair | Ahmedaba/new Delhi, New Delhi |
Updated: June 25, 2015 6:05:37 am
Housing for All initiative launch, Housing for All, narendra modi, Housing for All modi, Pradhan Mantri Awas Yojana, PMAY, Narendra Modi Housing for All, NDA government, Indian express, business news Separate rental policy to be released much later.

As Prime Minister Narendra Modi unveils the ‘Housing for All’ by 2022 on Thursday, rental housing, proposed with an outlay of Rs 6,000 crore, will now be missing from the NDA government’s flagship shelter mission.

According to officials, the mission originally had provisions for creation of urban rental housing for the homeless population and migrant workers. Affordable and social rental housing were to be included as a preventive measure against proliferation of slums that have so long provided informal housing to those who cannot afford to buy or rent homes.

“The Expenditure Finance Committee, chaired by secretary (Expenditure), even cleared the proposed outlay of Rs 6,000 crore for the rental component of the mission. There were varied views within the ministry on the issue and finally it was decided that the rental element would be dropped altogether from the mission,” said an official from the Ministry of Housing and Urban Poverty Alleviation.

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It is now proposed that a separate rental housing policy would be released much later. “Excluding rental housing from the mission and instead bringing out a separate policy would not help the cause. A mission provides for substantial Central grants. A policy, on the other hand, has no outlay by the Centre and without financial incentives, there is nothing that makes it binding on the states to implement rental housing,” said a ministry official.

As per the earlier proposal, the Government of India was to provide for 75 per cent of the construction cost of rental units. The remaining 25 per cent were to be borne by states, urban local bodies, non-government organisations or as part of the corporate social responsibility of private firms. The rental housing could be in the form of dormitories for migrant labour and 300 sq ft rooms in case of families. These homes were to be vacated within five years by which time migrants were expected to save enough be able to buy their own home or rent one at market rates. The five-year tenure was, however, not applicable in case of destitute and homeless populations.

Under the original proposal, rental units were to constitute 20 per cent of the total 2 crore proposed houses for the economically weaker sections and low income groups. With the rental component left out, the ‘Housing For All’ mission, that will be launched by Modi on June 25, will comprise of only four verticals for ownership houses namely slum redevelopment, credit-linked subsidy, affordable housing in partnership and subsidy for beneficiary-led house construction or upgradation.

A 2013 report by the task force for rental housing, set up by the ministry, noted that since the poor do not have accumulated savings to buy a house, the only alternative for them is affordable rental housing.

“Affordable rental housing, in a manner of speaking addresses the issues of the underprivileged and inclusive growth, in fact in an even more direct manner than affordable ownership housing,” it said.

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