The government is finalising a policy for urban areas that will encourage the role of private players to make owning a house affordable in towns and cities.

"Taking feedback from sectoral developments since 1998, we are finalising a new National Urban Housing and Habitat Policy," Kumari Selja, Minister for Housing and Urban Poverty Alleviation, said at a conference organised by National Real Estate Development Council. 

The policy would recognise the role of private enterprises and market forces, Selja said. It envisages a facilitative role for the state and a direct and proactive role for others.

Pointing out that over Rs 4,00,000 crore (Rs 4,000 billion) was required to meet the housing demand, she said the huge sum could neither be provided by the government nor private sectors alone.

"It has to be done in a participatory manner involving various stakeholders," she added. The policy aims at making houses affordable in urban areas, Sunil Kumar Singh, joint secretary in the ministry, told reporters in New Delhi. 

The policy did not need to be passed by Parliament and only a Cabinet approval was sufficient, he said.

To a query, Singh said there was no proposal from his ministry to levy a one per cent cess on annual incremental home loans of housing finance companies and banks.

Earlier, there were reports such a cess is proposed to be imposed for a new 'safety fund' under the policy. Singh said the policy would be for urban areas only as the housing problems of these areas were distinct from rural areas because of land use and licensing issues.