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‘Affordable housing policy’ a non-starter

LUDHIANA: The ‘Affordable housing policy’ was launched by the Punjab Government with a lot of fanfare in March last year in a bid to meet the growing demand for affordable houses by lower and lower middle class, especially the economically weaker sections.

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Kuldip Bhatia

Ludhiana, January 2

The ‘Affordable housing policy’ was launched by the Punjab Government with a lot of fanfare in March last year in a bid to meet the growing demand for affordable houses by lower and lower middle class, especially the economically weaker sections. However, due to various factors such as bureaucratic indifference, coupled with high burden of taxation, liquidity crunch in the real estate sector and procedural wrangles in granting approval to the projects, the policy has failed to yield any results as of now.

While not even a single licence under the affordable housing policy has been granted till now in the city by the Greater Ludhiana Area Development Authority, an advertisement released by the state government says a total of 11 licences had been issued in the state for affordable housing projects. Even after speaking to 12-odd senior officials of the Housing and Urban Development Department, Punjab and Local Area Development Authorities, the breakup of these licences could not be known which raises another question mark over the authenticity of the claim.

There is a general impression that the policy was formulated without having detailed interaction with the stake holders – the developers and end-users, which had resulted in the policy having been confined to a mere document. It was felt that there was need to revisit the policy from buyers (end-users) perspective and connect it closely with viability and quality of life due to the fact that even among the lower and lower middle class people, the craze for buying a plot and constructing a dwelling unit, still persisted.

A city-based developer Gulshan Kumar (of GK Group) was of the firm view that both the realtors and buyers (of affordable houses) were reluctant to avail themselves of the ‘affordable housing scheme’, which comprised of a centrally-sponsored ‘credit linked subsidy scheme’ (CLSS) with a subsidy of Rs 2.67 lakh per housing unit simply because high taxes (12 per cent goods and services tax and stamp duty), development charges, change of land use fee and infrastructure development cess neutralised the subsidy portion.

He said the state of Punjab had particularly lagged far behind in the implementation of affordable housing scheme, which was designed to be executed under the centrally sponsored Pradhan Mantri Awaas Yojna (PMAY), may be due to political reasons. He said certain states (mostly BJP-ruled ones), including Haryana, Uttar Pradesh, Maharashtra and Uttarakhand, had got central subsidy of nearly Rs 3,000 crore which accounted for nearly 55 per cent of the total affordable houses planned under the PMAY.

“Under the PMAY, which was introduced in June 2015, approval for 68.5 lakh houses has been accorded. Out of these, 12.42 lakh houses have been constructed till now and work on other 23.25 lakh units is under process. Out of the total approved outlay of Rs 1,00,275 crore under the PMAY, around Rs 33,455 crore has been released to various states with Punjab claiming an insignificant portion,” said Gulshan Kumar.

He said unless the constraints like relaxation in the maximum permissible area of the colony (for affordable housing), reduction in development charges, change of land use fee and licence fee were removed, the housing scheme for urban poor would be rendered useless and the target of ‘housing for all’ by 2022 would remain on paper.

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