National Urban Housing Fund: Will it solve the Housing Shortage of 1.2 crore?

February 20, 2018

  1. Context:

    1. Cabinet has approved creation of National Urban Housing Fund (NUHF).

    2. There is a housing shortage of 1.2 crore houses.

       

       

       

     

  2. Function of NUHF:

    1. It will facilitate raising requisite funds in next four years so that low of Central Assistance under different verticals i.e.

      1. Beneficiary Linked Construction (BLC),

      2. Affordable Housing in Partnership(AHP),

      3. In-Situ Slum Redevelopment (ISSR) and

      4. Credit Linked Subsidy Scheme (CLSS) is sustained and construction of houses to address the gap in Urban Sector progresses smoothly.

  3. Custody of Fund:

    1. Body: Building Materials and Technology Promotion Council (BMTPC)

    2. Ministry: Ministry of Housing and Urban Affairs.

  4. Verticals Explained: All these are under Pradhan Mantri Awas Yojana

     

      

    1. Beneficiary Linked Construction (BLC):

      1. Funding: Central assistance plus State assistance and assistance of Urban local bodies.

      2. Targeted Audience:

        • Economically weaker section and Lower Income group who are residing in slums or outside slums but owning land and wish to either construct new houses or enhance existing houses on their own.

        • They should be part of Housing for all plan of action.

      3. Features:

        • Central assistance is provided through transfer to beneficiary account. However, instead of sending money directly, central government issues funds to state government in lump sum which releases it to beneficiary in 3-4 installments depending on construction status.

    2. Affordable Housing in Partnership(AHP):

      1. Feature:

        • It is a supply side intervention in which houses for economically weaker sections will be constructed in partnership with private sector industries, states and Union territories at the rate of 1.5 lakh per EWS house.

        • There will be a ceiling on selling of EWS house to keep them affordable and accessible.

    3. In-Situ Slum Redevelopment (ISSR):

      1. Slums, whether on Central Government land/State Government land/ULB land, Private Land, should be taken up for “in-situ” redevelopment for prov

         

        iding houses to all eligible slum dwellers. Slums so redeveloped should compulsorily be denotified.

      2. Slum development will be done on Public Private partnership basis using land as a resource

    4. Credit Linked Subsidy Scheme (CLSS):

      1. Funding:

        • It is a central sector scheme i.e. full funding is provided by the centre.

      2. Targeted Audience:

        • Economically weaker section,

        • Lower Income Groups.

      3. Nodal Agencies: Two central nodal agencies

        • National Housing Board (NHB)

        • Housing Urban development Corp. (HUDCO)

      4. Functioning:

        • The amount of interest subsidy allowed by the central government is apportioned directly against the principal outstanding of the loan amount at the very inception of the loan tenure. It means that if Mr. X takes a loan of rupees 100 and a subsidy of rupees 20 is applied than he  will need to pay according to Rupees 80 as principle.

  5. Benefits of Fund:

    1. It will give momentum to the development of Housing for All scheme.

    2. It will give boost to the Real Estate sector which has been reeling under various stresses since the last few years.

    3. It will lead to beautification of cities which might help promote tourism.

    4. Development of Slums can lead to reduction in crimes and thus help in imposing rule of law.

    5. It will lead to inclusion of marginalized sections.

 

 

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