Budget 2014 : Finance Minister Announces Rs 4,000 Crore for Low Cost Housing
In the union budget, the finance minister has announced the creation of low cost housing through the National Housing Banking program. While allocating Rs 8,000 crore to the National Housing Bank to support rural housing, he also proposed an allocation of Rs 4,000 crore through the program for low cost housing for the urban poor. The government has proposed to increase the housing loan interest deduction limit from Rs 1,50,000 to Rs 2,00,000, which means that loan interest will be payable on a housing loan of Rs 2 lakh and above instead of the previous Rs 1.5 lakh.
The finance minister announced that a new scheme of public-private partnership in affordable housing as well as other options were being looked at. He added that the government would extend additional tax incentives on home loans for encouraging people to own houses.
This may indicate a good start for providing affordable housing for all, which was one of the key agendas of the Modi government.
Background
Affordable housing is an important need of the hour. The projected shortage of affordable housing is expected to be about 30 million by 2022. One of the major agendas of the new government apart from creating 100 smart cities is creating affordable housing for all by 2022. According to the Urban Development and Housing Minister, the government is looking into various models to raise funds to make this dream a reality.
Centre and states join hands
Earlier in July 2014, the Housing and Urban Development ministers from the states and the Centre joined hands and adopted a resolution of “National Declaration on Urban Governance and Housing for All” at a conclave held in Delhi. The Centre proposed a 25-point Urban Reforms Agenda at the conclave and the states resolved to implement this agenda. According the declaration, the central government has committed to rationalise approval processes and fund flows to states as well as union territories (UTs). Help will be sought not only from the states but also from urban local bodies (ULBs), NGOs and financial institutions. The declaration talks about providing emphasis on socially and economically backward sections.
The Central minister emphasised on the requirement of Geographical Information System (GIS) based regional planning, infrastructure development and sanitation. He also emphasised on providing an efficient public transport system, drinking water and solid waste management as well as conservation of energy and environment.
The minister also emphasised on ‘out of the box‘ thinking to implement affordable housing. This will involve proper zoning, making towns and cities slum-free and creating 100 smart cities, in order to decongest the present cities.
‘Infrastructure’ status for housing
The Central Housing and Urban Development Minister has also hinted about a proposal giving the status of infrastructure for the housing sector. This, according to him, will give the sector more credit, while bringing in more regulations. The ministry also said that this would enable builders to raise bank loans for longer tenure at lower interest rates. Simultaneously, this will help improve the housing stock and bring down housing prices.
