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HOUSING FOR ALL BY 2022
Urbanization is one of the important realities of recent decades in India. Its urban system consists of 7933 cities and towns of different population sizes, and a population of 377.16 million (Census 2011) which is the second largest in the world. India entered into a different demographic trajectory with the net increment to urban population exceeding the net increment to rural population. The United Nations (2014) estimates that much of the population increase in India between 2015 and 2030 will take place in urban areas during which it will add 164 million people to its urban base. The scale of the projected urban population increase is extraordinary, offering both an opportunity as well as a challenge for it to mobilize its resources and capacity to manage the transition.
The lack of housing and basic services at the required pace to meet the challenges of urbanization has resulted in the development of slums and squatter settlements with wider ramifications on the health, safety, and well-being of the citizens. The gap between the supply and demand of the housing has been widening, thus pushing up the market rates for housing in urban areas. As reported by the Technical Group on Urban Housing Shortage (2012-17), constituted by the Ministry of Housing and Urban Poverty Alleviation (MoHUPA), Government of India, there is a shortage of 1.88 crore dwelling units, out of which nearly 96% belongs to the Economically Weaker Sections (EWS) and Lower Income Group (LIG) households.
According to MoHUPA, the housing shortage in urban areas, assuming the projected slum households to go upto 1.80 crore at a decadal growth rate of 34% and non-slum urban poor households of 0.20 crore, is projected at 2.00 crore by 2022. In the backdrop, a comprehensive “Housing for All by 2022” in a mission mode has been launched by MoHUPA in the middle of 2015. The ‘Housing for All by 2022” Mission (HFA) envisions provision of housing for all by 2022 when the Nation completes 75 years of its independence. As per HFA, 2.00 crore new houses would be built to meet the shortage in next seven years. Mission with all its components has become effective from 17.06.2015 and will be implemented upto 31.03.2022.
As per the Mission, a beneficiary family will comprise of husband, wife and unmarried children and the family should not own a pucca house (an all weather dwelling unit) either in his/her name or in the name of any member of his/her family in any part of India. The EWS households are households having an annual income up to Rs.3.00 Lakh and LIG households are households having an annual income between Rs.3.01 Lakh to Rs.6.00 Lakh. States/UTs shall have the flexibility to redefine the annual income criteria as per local conditions in consultation with the Centre. As regards house size, it shall be an all weather single unit or a unit in a multi-storeyed super structure having carpet area of upto 30 sq. m. and 60 sq. m. for EWS and LIG respectively with adequate basic civic services and infrastructure services like toilet, water, electricity etc. Flexibility is available to States to determine the area based on their local needs with information to Ministry. Primary Lending Institutions (PLI), under the mission, include Scheduled Commercial Banks, Housing Finance Companies, Regional Rural Banks (RRBs), State Cooperative Banks, Urban Cooperative Banks or any other institutions as may be identified by the Ministry.
The HFA Mission seeks to address the housing requirement of urban poor including slum dwellers through the programme verticals such as: (a) Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource (“In Situ Slum Development); (b) Promotion of Affordable Housing for weaker section through credit linked subsidy; (c) Affordable Housing in Partnership with Public & Private sectors; and (d) Subsidy for beneficiary-led individual house construction /enhancement. The Mission shall be implemented through the said four verticals giving option to beneficiaries, Urban Local Bodies (ULBs) and State Governments as per the modalities herein below mentioned:-
a.“In-situ” Slum Redevelopment using land as Resource: “In-situ” slum rehabilitation using land as a resource with private participation for providing houses to eligible slum dwellers is an important component of the HFA mission. This approach aims to leverage the locked potential of land under slums to provide houses to the eligible slum dwellers thereby bringing them into the formal urban settlement.
Private partner for Slum Redevelopment would be selected through open bidding process. State Governments and cities would, if required, provide additional Floor Area Ratio (FAR)/Floor Space Index (FSI)/Transferable Development Rights (TDR) for making slum redevelopment projects financially viable. Slum rehabilitation grant of Rs. 1 Lakh per house, on an average, would be admissible for all houses built for eligible slum dwellers in all such projects. States/UTs will have the flexibility to deploy this central grant for other slums being redeveloped for providing houses to eligible slum dwellers with private participation, except slums on private land. It means that States/UTs can utilize more than Rs. 1 Lakh per
house in some projects and less in other projects but within overall average of Rs. 1 lakh per house calculated across the State/UT.
b.Credit-Linked Subsidy Scheme: The Mission, in order to expand institutional credit flow to the housing needs of urban poor will implement credit linked subsidy component as a demand side intervention. Credit linked subsidy will be provided on home loans taken by eligible urban poor (EWS/LIG) for acquisition, construction of house. Beneficiaries of Economically Weaker section (EWS) and Low Income Group (LIG) seeking housing loans from Banks, Housing Finance Companies and other such institutions would be eligible for an interest subsidy at the rate of 6.5 % for a tenure of 15 years or during tenure of loan whichever is lower (>15 < 30 years no subsidy). The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9 %.
The credit linked subsidy will be available only for loan amounts upto Rs 6 Lakh and additional loans beyond Rs. 6 Lakh, if any, will be at non-subsidized rate. Interest subsidy will be credited upfront to the loan account of beneficiaries through PLIs resulting in reduced effective housing loan and Equated Monthly Instalment (EMI). Credit linked subsidy would be available for housing loans availed for new construction and addition of rooms, kitchen, toilet etc. to existing dwellings as incremental housing. The carpet area of houses being constructed or enhanced under this component of the mission should be upto 30 sq. m. and 60 sq. m. for EWS and LIG respectively in order to avail of this credit linked subsidy. The beneficiary, at his/her discretion, can build a house of larger area but interest subvention would be limited to first Rs. 6 Lakh only.
Housing and Urban Development Corporation (HUDCO) and National Housing Bank (NHB) have been identified as Central Nodal Agencies (CNAs) to channelize this subsidy to the lending institutions and for monitoring the progress of this component. Preference under the Scheme, subject to beneficiaries being from EWS/LIG segments, should be given to Manual Scavengers, Women (with overriding preference to widows), persons belonging to Scheduled
Castes/Scheduled Tribes/Other Backward Classes, Minorities, Persons with disabilities and Transgender. Under the Mission, beneficiaries can take advantage under one component only.
c.Affordable Housing in Partnership (AHP): The third component of the mission is affordable housing in partnership. This is a supply side intervention. The Mission will provide financial assistance to EWS houses being built with different partnerships by States/UTs/Cities. To increase availability of houses for EWS category at an affordable rate, States/UTs, either through its agencies or in partnership with private sector including industries, can plan affordable housing projects. Central Assistance at the rate of Rs.1.5 Lakh per EWS house would be available for all EWS houses in such projects. An affordable housing project can be a mix of houses for different categories but it will be eligible for central assistance, if at least 35% of the houses in the project are for EWS category and a single project has at least 250 houses. Allotment of houses to identified eligible beneficiaries in AHP projects shall be made following a transparent procedure as approved by State Level Sanctioning & Monitoring Committee (SLSMC) and beneficiaries selected shall be part of HFA.
d. Beneficiary-led individual house construction or enhancement: The fourth component of the mission is assistance to individual eligible families belonging to EWS categories to either construct new houses or enhance existing houses on their own to cover the beneficiaries, who are not able to take advantage of other components of the mission. Such families may avail of central assistance of Rs. 1.50 Lakh for construction of new houses or for enhancement of existing houses under the mission. Beneficiaries desirous of availing this assistance shall approach the Urban Local Bodies (ULB) with adequate documentation regarding availability of land owned by them. Such beneficiaries may be residing either in slums or outside the slums. Beneficiaries in slums which are not being redeveloped can be covered under this component if beneficiaries have a Kutcha or Semi-Pucca house.
Implementation Process: As a first step, States/UTs will sign a Memorandum of Agreement (MoA) to participate in the mission by agreeing to mandatory conditions and other modalities. States/UTs will send proposals to the Ministry for inclusion of cities in the mission along with broad assessment of housing and resources requirement. Ministry will approve inclusion of these cities considering availability of resources. The credit linked subsidy component of the mission will, however, be implemented in all statutory cities/towns across the country right from the launch of the mission. State/Cities will undertake a demand survey through suitable means for assessing the actual demand of housing. On the basis of demand survey and other available data, cities will prepare Housing for All Plan of Action (HFAPoA). Jan Dhan Yojana/other bank account number and Aadhaar number/Voter ID card/any other unique identification details of intended beneficiaries or a certificate of house ownership from Revenue Authority of Beneficiary’s native district will be integrated in the data base of HFAPoA for avoiding duplication of benefit to one individual family. On the basis of HFAPoA, States/Cities will subsequently prepare the Annual Implementation Plans (AIPs) dividing the task upto 2022 in view of the availability of resources and priority. Based on the AIP approved, the projects would
be implemented. Cities which have already prepared Slum Free City Plan of Action (SFCPoA) or any other housing plan with data on housing, shall utilize the existing plan and data for preparing HFAPoA.
A Technology Sub-mission set up under the Mission would facilitate adoption of modern, innovative and green technologies and building material for faster and quality construction of houses. The Technology Sub-Mission will also work on the following aspects: i) Design & Planning; ii) Innovative technologies & materials; iii) Green buildings using natural resources; and iv) Earthquake and other disaster resistant technologies and designs.
In the spirit of cooperative federalism, the Mission will provide flexibility to States for choosing best options amongst four verticals of the Mission to meet the demand of housing in their states. The process of project formulation and approval in accordance with Mission Guidelines would be left to the States, so that projects can be formulated, approved and implemented faster. The Mission will provide technical and financial support in accordance to the Guidelines to the States to meet the challenge of urban housing.
Mission shall be monitored at all three levels: City, State and Central Government. CSMC will monitor formulation of HFAPoA, Annual Implementation Plans (AIPs) and project implementation. Suitable monitoring mechanism is developed and put in place by the Mission. States and cities are also be required to develop monitoring mechanism for monitoring the progress of mission and its different components.
It may be concluded that the HFA mission, an improved version of earlier two schemes, may be treated as a significant step in the right direction to transform the Affordable Housing paradigm in India. The announced features and incentives to private players would definitely prove the first steps taken in addressing the housing deficit challenge facing our nation today and to overcome the hesitation of the target segment towards formal home ownership.
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