New Public-Private-Partnership(PPP) model under affordable housing scheme

Ministry of HUA unveils New PPP Model for Affordable Housing (Housing for All Scheme)

Whenever we heard the news about any subsidy scheme, our face blushes with smile. To enhance the glow on each face under the affordable housing scheme centre announces two new public-private-partnership models to the 6 existing one. Mr. Hardeep Singh Puri, the Union Minister of HUA (Housing and Urban Affairs), announced these 2 new PPP policy under the scheme of Housing for All by 2022.

The main facets of this policy is on the subsidised amount of Rs. 2, 50,000/- on interest from Bank Home Loans for each house even built by private builders on private land. Everybody understands the nuances when it is limited only to Government and due to this the scheme is reached to some person only since the land under Government is limited. Again after the private involving the Vision of our Honorable Prime Minister that is Housing for All by 2022 will be fulfilled.

Important things you need to know about New PPP Model

The new PPP model has 2 important points under the Housing for All Scheme. Which can be understand better through the below :

Subsidised Scheme for Bank home Loans:

Under the New PPP model, the centre announces a subsidy of Rs. 2.5 lakhs to the buyers on their Bank Loan’s interest for houses under the affordable scheme of CLSS( Credit Linked Subsidy Scheme) component of Pradhan Mantri Awas Yojana (PMAY) even they are built by private builders on private lands.

Subsidised Scheme for Non Loans:

The centre also gives a subsidy to the buyer who does not wish to take loan, a subsidy amount of Rs. 1.5 Lakhs per each house built on private lands.

Besides the above two Central Government is already working on below 6 Points under the affordable scheme:

DBT (Direct Benefit Transfer) :

It can also be termed as Design, Build and Transfer Model through which private builders can build, design and transfer houses to the Public Authority which has been constructed on Government Lands. Under this model Home-Buyers will make payment directly to the Government and the private builders will get their payment from public authority after successful completion of each part of the project.

Cross-Subsidised Housing with other development:

Government lands will be allotted based on number of affordable houses to be built on the plot offered to private builders. Governments also cross subsidizing this segment from the revenues from high end house building or commercial development.

Annuity Based-Subsidised Housing:

Government will invest some amount as the deferred which will be paid to the private builders. As per Government norms the allocation of Land to builders is based on unit cost of construction.

Annuity-cum-Capital Grant-Based-Affordable Housing:

Apart from annuity payments, private builders could be paid a share of project cost as an advance payment.

Direct Relationship-Ownership Housing:

Under this option, promoters will directly deal with buyers and recover costs. Allocation of public land is based on unit cost of construction while earlier we have seen that Government act as a mediator.

Direct Relationship-Rental Housing:

 Under this model, private builders recover the costs through the rental incomes which comes from the houses built on government lands.

Shri Puri informed that a view would soon be taken on allowing urban housing projects. Online mechanism for time bound approvals for building plans and construction permits has already been introduced in Delhi and Mumbai and the same would happen soon in 53 cities with population of above 10 Lakhs people each, he said. He also send a clear message to private developers to seize the investment opportunities in affordable housing by saying ‘’It is time to stop debate and swing into action”.

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2 Thoughts on “Ministry of HUA unveils New PPP Model for Affordable Housing”

    • Thank you Chaitanya,
      Soon we will publish an article about Insurance. But it will really helpful if you would provide an information which insurance information you require the most..
      Stay connected to Compare2loan

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