As part of the first Budget of the Narendra Modi government’s second term, Finance Minister Nirmala Sitharaman announced that reform measures would be taken to promote rental housing. Terming the current laws to be “archaic”, the Finance Minister announced that a Model Tenancy Law would be circulated among states.
“It is proposed that several reform measures be taken up to promote rental housing. Current rental laws are archaic as they do not address the relationship between the lessor and lessee realistically and fairly. A Model Tenancy Law will also be finalised and circulated to the states,” Nirmala Sitharaman stated.
In 2015, the Ministry of Housing and Urban Affairs had released a Draft Model Tenancy Act, which was aimed at regulation of tenancy for commercial and residential properties.
At the time, the government aimed for decisions on tenancy to be determined on conditions agreed on by the landlord and the tenant, than by law. “The Model Tenancy Act proposes to establish a framework for the regulation of Tenancy matters (residential and commercial) and to balance the rights and responsibilities of landlords and tenants including a process of fast adjudication process for resolution of disputes,” the government had stated at the time. This draft document sought to balance the rights of responsibilities of both parties, sought for registration of rental contracts with authorities, laid an adjudication process of dispute resolution through rent tribunals, repossession of the premises by the landlord through rent courts, etc.
The Finance Minister also stressed on the Modi government’s 2022 ‘Housing for All’ project, to provide affordable housing across the country. Nirmala Sitharaman said that about 1.5 crore homes were completed in the first phase of Pradhan Mantri Awas Yojana (PMAY). “In the second phase of PMAY-Grameen, 1.95 crore houses to be provided to eligible beneficiaries, during 2019-20 to 2021-22; they will have amenities such as LPG, electricity and toilets. Every single rural family, except those unwilling to take connection, will have electricity, LPG connection by 2022,” she said.
Speaking on urban housing under PMAY-U, Nirmala Sitharaman said 81 lakh houses with a budget of Rs 4.83 lakh crore have been sanctioned, and construction has begun for 47 lakh houses. “26 lakh houses have been completed and 24 lakh delivered to beneficiaries,” she said.