After a wait of several years, the Ministry of Housing and Urban Affairs (MoHUA) has finally awarded infrastructure status to the largely-neglected affordable housing, which is encouraging for developers. The move will help affordable housing projects avail the associated benefits such as lower borrowing rates, tax concessions and increased flow of foreign and private capital. Union Minister Hardeep Singh Puri has announced this on Monday.
Officials said infrastructure status will further simplify approval process for affordable projects, create clear guidelines and increase transparency in the segment. The status of infrastructure to affordable housing will allow additional private players to participate, adding to competition. This will provide better options for consumers allowing them to buy their first homes. Consumers will also benefit from the credit off-take, as they will have access to cheaper financing.
“The Government had already announced a subsidy scheme for first home buyers. Therefore, lower cost of borrowing for home buyers as well as developers, will surely help the affordable housing segment,” officials said.
“The larger goal is to fulfil the housing need of homeless urban poor and enable them to own decent pucca houses with basic infrastructure facilities by 2022. Based on demand assessment at the State level, the nation has the mammoth task of constructing about 12 million houses under EWS/LIG segment,” Puri said.
“The announcements were also made pertaining to the affordable housing such as profit-linked I-T deduction, relaxations on tax for vacant/unsold units for 1 year, among others,” Puri added.