Budget holds the key for the homeless

With urban housing shortage estimated at a worrisome 2.47 crore units at the end of the 10th Five-Year Plan...

With urban housing shortage estimated at a worrisome 2.47 crore units at the end of the 10th Five-Year Plan and with economically weaker sections (EWS) and low income groups (LIG) suffering with 99 per cent of this shortage, the Ministry of Housing and Poverty Alleviation is introducing a new scheme that will provide interest subsidy on housing for the poor. The scheme is likely to be unveiled in the upcoming budget.

The scheme would encourage poorer sections to avail of loans through commercial banks or HUDCO for the construction of houses, and avail of subsidy on interest. This subsidy is likely to be in the tune of 5 per cent.

“As per the scheme, banks will be given loan subsidy directly once they provide proof that they have loaned money to low income groups for housing,” said housing and urban poverty alleviation minister Kumari Selja. “We have submitted the proposal to the Finance Ministry and it is in an advanced stage. We expect it to be introduced in the upcoming budget.” EWS is defined as those groups whose monthly household is up to Rs 3,300 a month, while LIG groups are those who earn between Rs 3,301-7,300 a month.

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The minister said the recently constituted high-level task force under HDFC chairman Deepak Parekh would submit its report in four months. It is likely to recommend financial and spatial incentives to companies that would either rent or mortgage out flats to employees.

Apart from housing, the ministry has also said that it aimed to do away with the manual scavenging system in the country by revising the Integrated Low Cost Sanitation (ILCS) scheme. “There are still six lakh dry latrines in the country. We aim to convert most of these in the next three years,” said Selja.

The ministry plans to do this by giving a 75 per cent central subsidy. The project cost for converting 600,000 dry latrines is Rs 715 crore out of which central subsidy comes to around Rs 545 crore during the 11th Plan.