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Centre releases new PPP policy

The move is aimed at increasing private participation in affordable housing projects

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Hardeep Singh Puri
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In a bid to promote private investment in affordable housing, the Centre on Thursday released a new public private partnership (PPP) policy. The policy allows the extension of central assistance of up to Rs 2.50 lakh per house that is to be built by private builders — even on private land.  

With this, it intends to meet the ‘Housing for All’ target by 2022, as the policy seeks to assign risks among the government, developers and financial institutions.

Additionally, the Centre will soon release a Model Tenancy Act and the National Rental Housing Policy, which aims to promote rental housing across the country. And to make getting permits easier, union minister of state for housing and urban affairs, Hardeep Singh Puri, announced that they will extend the online mechanism for building plans and construction permits approvals —  currently implemented in Mumbai and Delhi — to 53 cities with population above one million each.

Puri explained that the central assistance will be given as an interest subsidy on bank loans and as upfront payment under the credit-linked subsidy component (CLSS) of Pradhan Mantri Awas Yojana (urban). Under the second option, in case the beneficiaries do not intend to take bank loans, central assistance of Rs 1.50 lakh per each house built on private lands would be provided.

Puri was speaking at the realty conference organised by the National Real Estate Development Council (Naredco), where he expressed concern over the private sector shying away from the affordable housing segment despite being given access to the best ecosystem. “It’s time to stop debate and swing into action,’’ he stated.

Under the Design-Build-Transfer (DBT) model, private builders can design, build and transfer houses built on government lands to public authorities. The government land will be allocated based on the least cost of construction and payments to builders will be made based on progress of projects, determined by agreed upon milestones. The buyers can then pay directly to the government.

As for mixed developed cross subsidized housing, government land will be allotted based on number of affordable houses to be built on the plot offered to private builders, cross subsidizing this segment from revenues.

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