New Delhi The Union Ministry of Housing and Urban Affairs is unlikely to sanction any more houses under the flagship affordable housing scheme (Urban) for the next one year as it gears up to complete the sanctioned projects.
The change in focus comes as only 6.1 million homes out of the total 12.2 million approved have been completed. Work has started on about one crore houses. This figure includes 6 million completed homes.
Two officials familiar with the matter said that the demands that have come from the states so far have been met to a large extent and the states will now have to work towards completing the projects.
“Our emphasis right now is to complete those houses, as the stakeholders are the beneficiaries, the central government and the state government. Approval is not enough. The houses are being constructed either by the beneficiary or the urban body or the state government. They need to be started and completed at the earliest,” said one of the two officials.
Another official said that at least for the next one year, the focus of the Center will be on talking to all the states and ensuring that the houses which have been sanctioned are completed so that they can be used by the beneficiaries.
Another official said that the states have not been able to get all the approved houses off the ground or start up. “There’s no state that can say ‘I’ve demolished all the houses you’ve given’. They still have to start over with the houses we approved.”
However, the two people mentioned above said that if there is a fresh demand for houses under the scheme from the states, the Center will look into the requests.
Prashant Thakur, Head of Research, Anarock Property Consultants said that the Covid-19 pandemic has forced a delay in the ‘Housing for All’ target, with the government now looking at completing the approved houses instead of adding more to the list of approved houses. Will do ,
In the Union Budget for FY 2013, Finance Minister Nirmala Sitharaman said that the government will now focus on faster approvals for projects under the scheme.
“The central government will work with state governments to reduce the time required for all land and construction clearances to promote affordable housing for the middle class and economically weaker sections in urban areas,” he said. To expand access to financial sector regulatory capital and reduce the cost of arbitrage.
Many of the demand-boosting incentives under the scheme stopped in FY22. A credit-linked subsidy scheme for affordable housing for people belonging to middle-income group (MIG) and low-income group (LIG) or economically weaker section (EWS) expired on March 31.
Similarly, additional tax deduction of 1.5 lakh on interest paid on housing loans for purchase of affordable homes, the deadline for which was extended twice, also expired in the last financial year.
The decision not to sanction new homes comes amid rise in cost of key commodities, including steel and cement, which has hit the affordable housing segment. According to industry estimates, construction costs have increased by about 20%.
The recent interest rate hike by the Reserve Bank of India is also expected to reduce the demand for housing going forward.
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