The development comes after FM Nirmala Sitharaman in the Budget said that construction of public infrastructure and affordable housing would be taken up through innovative instruments.

Government mulling policy to use land owned by PSUs for affordable housing
Money PSUs Wednesday, February 12, 2020 - 09:22

The government seems to be looking for innovative ways to monetise assets of loss-making Central Public Sector Enterprises (CPSE), as it is preparing a cabinet note for a policy to utilise land belonging to the government and CPSEs or public sector units (PSU) for building affordable housing projects.

The development comes after Finance Minister Nirmala Sitharaman in the Union Budget 2019-20 said that construction of public infrastructure and affordable housing would be taken up through innovative instruments such as joint development and concession.

Large public infrastructure can be built on land parcels held by Central ministries and central public sector enterprises all across the country, as per the budget FY20.

"Under the directions of Cabinet Secretariat, the Government Land Information System (GLIS) has been devised and hosted and National Centre of Geo-Informatics (NcOG) portal. The GLIS is an institutional framework having a data bank of all lands available with the Union Government. This is being updated with detail of buildings," said a Finance Ministry note.

"A draft cabinet note is under process to devise policy to utilise land belonging to government and sick/loss-making CPSEs for affordable housing," it added.

If implemented successfully, this would be another step by the Union Government in its much talked-about target of providing "housing for all" by the year 2022, of which affordable housing is a major component.

Several sick PSUs are sitting on huge tracts of land that have the potential for redevelopment and commercialisation. One such example is Indian Drug and Pharmaceuticals Ltd (IDPL) Company that is sitting on 834-acre of prime land in Rishikesh.

Scooters India is another PSU having prime land near UP state capital of Lucknow. There are several other PSUs with surplus land that could be used for creating dwelling units under the affordable housing scheme.

Launched on June 25, 2015, the Pradhan Mantri Awas Yojana (Urban) Mission aims to provide housing for all in urban areas by 2022, and according to data from the Housing and Urban Affairs Ministry, 32.07 lakh houses have been constructed and delivered so far under the scheme, out of the total sanctioned 1.03 crore houses.

Minister for Housing and Urban Affairs, Hardeep Singh Puri recently told the Lok Sabha that around 60.50 lakh units are at various stages of construction. As per the PMAY(U) guidelines, the size of a house for economically weaker sections (EWS) could be up to 30 square metre carpet area.

States and UTs, however, have the flexibility to enhance the size of houses in consultation and the approval of the ministry.

The programme includes the Credit Linked Subsidy Scheme (CLSS), whereby the government provides interest subsidy of 6.5 per cent, 4 per cent and 3 per cent on housing loan amounts up to Rs 6 lakh, Rs 9 lakh and Rs 12 lakh, respectively, for beneficiaries belonging to economically weaker sections (EWS) or the lower income group (LIG), middle income group-I (MIG-I) and MIG-II categories.

It also includes the 'In-situ Slum Redevelopment' (ISSR) scheme allowing Central assistance of Rs 1 lakh per house, among other benefits for affordable housing.

Another major announcement made in the Union Budget of 2019-20 with a view to support the target of 'housing for all' was a model tenancy law. The government has already come up with the draft model law. The Finance Ministry note says that a cabinet note with the Draft Model Tenancy Act has been submitted and after approval of the Union Cabinet, the Act will be circulated to states and Union Territories for their consideration and possible adoption.

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