34 GOVERNMENT INSTITUTIONAL SUPPORTING HOUSING IN INDIA
P.G. Padma Gowri
Introduction:
Structures or Buildings in that individual and family may live in meet certain federal regulations are called as Housing. Different housing Structures available for individuals and family.
Housing is one of the basic needs of life always remains in the top priorities of any person, society and economy. Every individual needs his own space and privacy, which can he provided by the ownership of a house.
Housing is one of the basic need of human beings assumes many side significance in terms of degree of economic well being and human development as well as socio-cultural progression and political stability. Indian government implemented several of steps for the mission – “Affordable Housing for All”.
Objectives:
- To know various government institutional supporting scheme housing in India
- To know housing scenario in India
The development of satisfactory housing has always been the priority of both the state and central governments. A rapid rise in population results in higher demand of houses for residential purposes. This coupled with the growth in household formation and increased urbanization in search of employment opportunities has resulted in severe pressure on urban infrastructure in now a days.
As the result overcrowding and unhealthy living environment, shortages of basic amenities and finally social and economic deprivation.
Housing:
The magnitude of the problem
Increase in population growth coupled with rapidly increasing urbanization and widespread poverty have created a serious shelter problem in India. The metropolitan cities slums are increased; it leads to the high demand for urban infrastructure and services.
In terms of investment requirements to meet housing shortage, the 33 million units target of the Ninth Five-Year Plan was estimated to require over Rs 1,50,000.00 crores.
To partially achieve this fund needed from formal sources such as banks, financial institutions, government-directed insurance companies, and central, state, and local governments. According to the Indian National Sample Survey’s (NSS- 44th round survey) , more than 80 % of housing finance comes from private savings, non-formal sources of credit and sale of assets.
Therefore, increasing funding through both the formal sector and informal sector is an essential and integral means to meet the housing needs of low-income households in India.
The Role of Government in Housing:
In view to freeing millions of Indians from the homeless of human indignity, the “National Housing and Habitat Policy 1998(NHHP) “ was formulated with a promise to serve the underprivileged through institutional assistance. One of the major obstacles for public initiatives for housing is the exponential increase population explosion
The NHHP 1998 has therefore envisaged addressing the need for conserving the resource as well as the most effective utilization of available resources in tune with global concerns in this regard. The Government adopts the technique as a role of a facilitator instead of a provider.
The Working Group on Housing for the Tenth Plan has find that around 90 per cent of housing shortage pertains to the weaker sections. The Central Government and state governments are implementing a very large number of housing and habitat development schemes to solve the housing problems related to urban and rural areas. These schemes mostly targeted for economically weaker sections (EWS) and low income groups (LIG) in the country.
Valmiki Ambedkar Maim Basil Awas Yojana (VAMBAY):
This Scheme was launched in India on December, 2001 to provide shelter and upgrade the existing shelter for the urban slum peoples who are all living below poverty line. It involves a Government of India subsidy of 50% of total amount, while the balance 50% is expected to be arranged by the State Governments with funds from any source in the form of subsidy or loan from other agency.
The VAMBAY also aims at providing health and enabling urban environment facilities through community toilets under Nirmal Bharat Abhiyan. Reputed NGOs can also associate with the Scheme, especially in regard to the Nirmal Bhara Abliiyan.
Indira AwaasYojana(IAY):
The Government of India is implementing the Indira Awaas Yojana from the year 1985-86.The objective of providing assistance primarily to the below poverty line rural households belonging primarily to the Scheduled Castes, Scheduled Tribes and freed bonded labour categories. From the year 1993-94, it is expanded to cover non- scheduled castes and non-scheduled tribes rural poor subject to the condition that non SC/ST households. Benefits of the scheme have also been extended to the families of the Ex-servicemen and 3% of the houses are reserved for the below poverty line physically and mentally challenged persons living in rural areas.
The indian Government has recently launched Bharat Nirman, an ambitious programme for rural infrastructure in recent years. Under Bharat Nirman action is proposed in the areas of Irrigation, Rural Roads, Rural Housing, and Rural Water Supply, Rural Electrification and Rural Telecommunication Connectivity.
Rajiv Rinri Yojana (RRY):
It is an instrument to address the housing needs of the segments in urban areas, through enhanced credit flow. It is also formulated to channelize institutional credit to the poorer segments of the society and increasing home ownership in the country along with housing.
RRY has been formulated by modifying the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) in the 11th Plan period with enhanced volume of coverage. RRY is a Central Sector Scheme applicable in all the urban areas of the Country. Interest subsidy would, be limited to the first Rs 5 lakh of the loan in case the loan exceeds this amount.
Rajiv RinnYojana have a target for the 12th Plan period is 1 million (or 10 Lakh) places of residence across country for slum and non-slum dwellers. For the implementation of this Scheme, Housing and Urban Development Corporation (HUDCO) and National Housing Bank(NHB) are allotted as Central Nodal Agencies.
Interest Subsidy Scheme for Housing Urban Poor:
‘Affordable Housing for All’ is a Government of India’s important policy. An important initiative has been launched for provision of housing for the Economically Weaker Sections (EWS) and Low Income Groups (LIG) through the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The Ministry of Housing and Urban Poverty Alleviation (MH&UPA) – Government of India has designed an Interest Subsidy Scheme as an additional scheme for addressing the housing needs of the EWSILIG segments in urban areas. Interest subsidy of 5% on interest charged on the admissible loan amount to EWS and LIG segments to enable them to buy or construct a new house or for carrying out addition to the existing building.
Affordable Housing:
Address the Housing shortage through Public Private Partnership (PPP) provides a necessary help to the activities of the Housing Boards and development authorities and encourage State Governments, Union Territories to provide incentives to facilitate accelerated creation of affordable housing stock.
Scheme of “House Building Advance” for Central Government employees:
The Scheme of “House Building Advance “ for Central Government Employees is the vision of providing assistance to the Government employees to construct/acquire house/flats of their own. This scheme was introduced in 1956.
Ministry of Urban Development as the nodal Ministry for this scheme. “House Building Advance” is admissible to all those temporary employees also who have rendered 10 years of continuous service. The Ministries of the Departments are delegated powers to sanction house Building advance to their employees in accordance with the House Building advance rules.
“Housing for All by 2022” Mission — National Mission for Urban Housing:
“Housing for all by 2022” aimed for urban areas with following components/options to States/Union Territories and cities:
a) Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource.
b) Promotion of affordable housing for weaker section through credit linked subsidy;
c) Affordable housing in partnership with Public & Private sectors and
d) Subsidy for beneficiary-led individual house construction or enhancement. Central grant of Rs. one lakh per house, on an average, will be available under the slum rehabilitation programme.
Houses constructed under the mission would be allotted in the name of the female head of the households or in the joint name of the male head of the household and his wife. The scheme will cover the entire urban area consisting of 4041 statutory towns with initial focus on 500 Class-I cities and it will be implemented in three phases.
The Mission has a best practice in terms of affordable housing policies of the States/UTs designs and technologies adopted by States and Cities with an objective to spread best practices across States and cities. The Mission created a virtual platform to obtain suggestions and inputs on house design, materials, technologies and other elements of urban housing.
Pradhan Mantri Awas Yojana (Urban) for middle-income groups:
The scheme has been named as Credit Linked Subsidy Scheme for Middle Income Groups – CLSS (MIG). Under the Pradhan Mantn AwasYojana (Urban) scheme, middle income groups (MIG) with annual incomes of above R 6 lakh and up to R 18 lakh per year are all eligible for interest subsidy on buying their first home.
Prime Minister of India had announced interest subsidy of 4 per cent on housing loans of up to Rs 9 lakh for those with an income of Rs l2 lakh per year and of 3 per cent subsidy on housing loans of tip to Rs12 lakh for those earning Rs 18 lakh per year. This home loan provided with interest subsidy scheme
As a part of the government’s ‘Housing for all’ initiative. The scheme will be implemented initially for a period of one year. Additional loans beyond the specified limit, if any, will be at non-subsidized rate.
Highlights:
1. Home loans sanctioned or applications are under consideration since January 1, 2017, is eligible for interest subsidy under the Credit Linked Subsidy Scheme for Middle Income Groups. The beneficiary earlier should not have own a house in his/her name.
2. The total interest subsidy accruing on these loan amounts will be paid to the beneficiaries up front in one go, thus reducing the burden of Equated Monthly Installment (EMI).
3. Besides commercial banks, housing finance companies, regional rural banks, state and urban cooperative banks, other financial institutions like small finance banks and non-banking finance company-micro finance institutions can also lend under this scheme.
4. National Housing Bank (NHB) and Housing and Urban Development Corporation (HUDCO) will reimburse interest subsidy to the lenders. No extra processing fee will be charged by the lenders from borrowers.
5. Interest subsidy will be provided on loans for construction/acquisition of house with particular specification.
This scheme will help bring down overall interest cost for home loan borrowers, the brokerage added.
Housing Finance System in India:
The housing finance sector in India had its beginnings in the year 1960.The Government, through its various schemes for public and low- cost housing, was the sole provider of housing finance. Indian Government implemented many of its schemes through state housing boards.
State government allocated and housing to individuals based on social welfare, not commercial considerations. In the year 1970s two modifications done in the Indian housing finance sector. There are establishment of public sector housing company and Housing and Urban Development Corporation (HUDCO).
Then government formed National Housing Bank (NHB) in the year 1988 as an apex bank for housing finance.
NHB’s responsibilities include establishing guidelines for Housing Finance Institutions (HFEs) to ensure sound financial management, new loans given and mobilizing formal sector resources into housing finance. Government requested for Companies, commercial banks, provident funds, and other agencies to invest a part of their incremental resources in housing.
Many new HFCs were subsequently established during the 1980s to enter into the mortgage lending market. Government’s role as a facilitator of housing activity, rather than one of provider; this position was clearly given in the National Housing and Habitat Policy (NHHP) of 1998. As a result, Government contributions to housing finance have fallen to less than 9 %, compared with 23% four decades ago.
The liberalization of the financial sector has also accounted for increase new loans lending by formal finance institutions not traditionally in the housing sector, most notably commercial banks and non-bank financial institutions.
The setting up of the (NHB) as a fully-owned subsidiary of the Reserve Bank of India as an apex institution paved the way for the implementation of housing finance system in India.
The implementation of housing finance system sees the emergence of several specialized financial institutions which have strengthened the organization of the housing finance industry in the country.
List of such finance systems are,
o NHB -National Housing Bank.
o NABARD -National Bank for Agriculture and Rural Development.
o Commercial Banks Scheduled Urban Co-operative Banks.
o District Co-operative Banks.
o Scheduled State Cooperative Banks.
o Agriculture and Primary Land Rural Development.
HUDCO (Housing and Urban Development Corporation) NIWAS Individual Housing Loan Scheme:
HOUSING AND URBAN DEVELOPMENT CORPORATION Ltd. HUDCO provides financial assistance to individuals to enable them to acquire a home of their own through its “HUDCO NIWAS” Individual Housing Loan Scheme. Refinancing of existing housing loans from other financing institutions and banks
The loan will be disbursed in onetime payment or in suitable installments taking into account the requirements of funds and progress of construction. Repayment of loan amount got monthly basis in which the last installment of the loan is disbursed by “HUDCO NIWAS”. Until the loan is fully disbursed, pre-EMI interest is payable only on the portion of the loan availed on the last day of every month.
Conclusion:
Nations have a prime responsibility for delivering programs and services to their people. Resides the basic requirement of food and clothing, availability of decent and safe shelter is also an important component of quality living. The progress of any nation can be appreciated by the quality of life attained by its people. To attain quality in life basic requirement is proper shelter. Indian Government Support programs mentioned above in housing sector contribute to that basic need. Governments and other institutions provides help and support for the poor people to construct their own shelter.
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