Affordable Rental Housing: Base Of A New Social Commitment

Highlights

• The central government is going to convert government-funded homes in different cities into affordable rental housing through public-private partnerships (PPP) for urban poor.
• The government will also encourage private industry companies and state governments to develop affordable housing complexes for people working away from their home cities/villages/towns.
• These announcements were a part of the Indian government’s 2nd tranche of stimulus to revive the Indian economy from coronavirus crisis.

Coronavirus pandemic has brought a crucial special issue in the country, the need for better housing options for migrant workers and urban poor, The center is taking every possible step to control this situation so that such difficulties can be avoided in the future. Affordable Rental Housing Complexes for workers is one of them. It can be the base of a new social contract.

Under this scheme, a home buyer can avail of an interest subsidy of up to Rs 2.7 lakh. The scheme is driven by the National Housing Bank (NHB) and Housing Finance Companies (HFCs).

It is our responsibility as a society to ensure that the people who build the city can find a home in it, not through charity but by giving them the opportunity to make this economic development without being dehumanized.

Finance Minister Nirmala Sitharaman while announcing the 2nd tranche of the Rs 20 lakh crore stimulus package said that the Indian government will provide affordable rental housing to migrants and urban poor under Pradhan Mantri Awas Yojana (PMAY).

The 2nd tranche of the stimulus package was given to migrant workers, farmers, and urban poor who were amongst the worst hit by the COVID-19 outbreak in the country.

The central government is going to convert government-funded housing in different cities into affordable rental housing complexes (ARHC) using public-private partnerships. Besides, the government will incentivize private industry institutions to build homes on private lands.

The new scheme will impulse manufacturing units, industries, institutions, associations to develop such complexes on their private land and operate them. It will encourage central and state government agencies to develop ARHCs.

The Ministry of Housing and Urban Affairs will issue detailed guidelines on the initiative. FM Nirmala Sitharaman also encouraged state government organizations to develop affordable housing complexes.

Besides, the Finance Minister also announced free food for 8 crore migrants workers in the next 2-months. All those migrant workers who don’t have any ration card or state PDS card will get 5 kilograms of grains and 1 kilogram of Chana for the next 2-months.

Apart from that, she also announced the extension of CLSS up to March 2021. It is expected that about 2.5 lakh middle income families will benefit from 2020-21. Earlier, the scheme was extended till March 2020 and has served 3.3 lakh families so far.

CLSS was operationalized in the country from May 2017 for the middle-income group whose income stood at Rs 6-18 lakh.

The CLSS under PMAY makes the home loan affordable as the subsidy given on the interest part decreases the outflow of the customer on the home loan.

This will induce an investment of over Rs 70,000 crore in the housing sector. As a result, it will create job opportunities, help in driving demand for steel, cement, transportation, and other construction materials.

Migrant Housing Development Strategies is a welcome move by the Government of India and their intention to promote the ‘Affordable Rental Housing Complexes’ (ARHC) in Indian cities to support a major gap in our policies.  This move has the potential to change the entire landscape of urban India.