Govt plans home loan subsidies for newly married couples

New Delhi: There’s hope for married couples forced to share living space with other adults in a single-room house: The government is planning to offer them highly subsidised bank loans to build additional space. India has close to 15 million married couples who share living quarters with other adults for want of housing.

Moving beyond tackling India’s urban housing shortage, pegged at 18.78 million, the government is planning to help out couples living in congested circumstances, as well as those living in old dilapidated houses - numbering 2.27 million.

“This is very much on the anvil - to help in improvement of the structure, rather than build a brand new house,” Arun K Misra, Secretary in the Housing and Urban Poverty Alleviation ministry, said.

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“Such people can build additional facilities, like add extra rooms, to ease congestion,” he said, adding that the government is changing its subsidy support scheme under which individuals can take housing loans for home improvement.

The proposal for interest subsidy on loans for home improvement is to go to the union cabinet in the near future, he added.

[caption id=“attachment_493788” align=“alignleft” width=“380”]  Pic used for representational purposes only.[/caption]

The government is also planning to rope in the private sector to build affordable housing.

“It is a new policy scheme under which the private sector will be encouraged to build houses,” Misra said, adding that the sector would provide incentives to the builders in the form of “capital subsidy or through transferring the development rights of the land on the basis of its floor area ratio”.

This would help make the private sector an “important player” in constructing affordable housing for the urban poor, said the official.

“This proposal is also going to the cabinet,” he added.

The ministry is soon to set up a task force on affordable housing, Misra said.

“The task force will come up with a definite report. We will come to know the states where there is deficiency in urban housing and approach those states,” said the official.

The government is also planning to contact banks to provide loans to those belonging to the economically weaker sections (EWS) under the credit risk guarantee fund.

The cabinet had in March cleared setting up of the credit risk guarantee fund trust with an initial corpus of Rs.1,200 crore to give a push to housing for low-income groups.

“The government will stand guarantor for the EWS people who seek loans under the scheme to build or repair houses,” Misra said.

“The banks will give loans to the poor for Rs.5 lakh or less,” he said, adding that the “definition of EWS had changed to those earning Rs.8,000 per month from the earlier Rs.5,000 per month.”

The ministry is planning to hold a meeting on Oct 29 with the banks and state governments to inform them about the scheme.

Asked what the government would do in case the people defaulted on loans, Misra said that they “had observed that the poor people were regular in payments, unless there is a pressing need.”

Another important move is for amendment of the rent control act to make it attractive for house owners to rent out their vacant rooms/houses and also go in for building new homes for the purpose of renting, he said.

The ministry is approaching state governments to amend the act, which is loaded heavily in favour of tenants.

“We want the house owners and tenants to enter into an agreement of their choice,” said Misra and cited the case of Bangalore and Hyderabad where the huge working force catering to the IT and other major sectors reside mostly in rented accommodation.

“In these cities, hundreds of young people stay in rented accommodation,” Misra said.

Around 11 million houses are lying vacant, which the government hopes to tap.

The figures are from a task force report on urban housing shortage of the ministry.

IANS