Effects of the new schemes launched under the Pradhan Mantri Awas Yojana would be felt more in tier II and tier III cities, as not many budget or affordable housing projects are in the works in metropolitan cities.
The poor in urban India might stay untouched by the initiatives announced by the prime minister on the last day of 2016.
Effects of the new schemes launched under the Pradhan Mantri Awas Yojana would be felt more in tier II and tier III cities, experts said. Not many budget or affordable housing projects are in the works in metropolitan cities, they said.
The PM had announced two new schemes in the housing for all initiative under PMAY. Subsidised loans would be made available for building or expanding homes in rural India. Also, those wanting to build or expand their homes will get loans of up to Rs 2 lakh, with 3% interest relief.
Low-interest loans will also be made available to the urban poor, he said. And, housing for the rural poor was to be increased by 33%.
“In 2017, those who want to construct homes will get up to 4% interest subsidy for loan amounts up to Rs 9 lakh and 3% up to Rs 12 lakh," said Narendra Modi.
Under PMAY, the government aims to cover around two million non-slum urban poor households. Hence, the total housing shortage envisaged to be addressed through the new mission is 20 mn, it has said.
The mission is being implemented over 2015-2022, providing central assistance to urban local bodies and other implementing agencies, through states and Union territories.
Experts agree the affordable housing segment will get a needed boost but not in big cities.
“The fillip would be visible in rural and semi-urban areas. Tthe affect would not be much visible in cities, as the land prices are higher. But, this is a great move and in 2017, we will see a rise in affordable housing projects,” Anuj Puri, country head at JLL India, the realty consultancy.
“We should not look at only major or metropolitan cities when we talk of urban areas. The mass demand in terms of housing is coming from smaller towns. For slum-dwellers in cities, there are several other independent policies. Places like Mumbai or Gurgaon, Kolkata or Chennai, still have house prices under control,” said Samantak Das, chief economist at Knight Frank India.
There is a feeling that demonetisation, along with developments such as the Real Estate Regulatory Authority and a goods and services tax, will provide impetus to the sector, bringing more transparency and accountability in due course.
“So far, the government’s measures for affordable housing have not met with success. They should in the long term work on things like tax exemption on agricultural income,” said J C Sharma, vice-chairman at Bengaluru-based property developer Sobha.
Image: Children watch television on a mobile cart in Dharavi, the large urban slum sprawl in Mumbai. Photograph: Arko Datta/Reuters.