In order to provide a thrust to affordable housing before the next elections, land available with six loss-making central public sector enterprises has been identified to give momentum to Prime Minister Narendra Modi's pet initiative for the urban poor.
State-run construction company NBCC Ltd. will develop some of the land under the Pradhan Mantri Awas Yojana. The six CPSEs, including IDPL, HMT, Hindustan Antibiotics and Tungabhadra Steel Products, have about 3,000 acres.
A senior government official confirmed the development and said some of the projects would be completed before 2022. “We have put all such proposals on a fast track. The land available with sick CPSEs is in prime areas. In some cases, we will allow mixed use,” the official said.
Launched in 2015, the initiative aims to secure ‘Housing for All’ by 2022. The government amended the scheme last week to allow beneficiaries under the rural waitlist to opt for a house under the urban quota. “We expect more such projects in the near future as the government has decided to exit lossmaking entities,” said an executive with NBCC.
NBCC has been appointed as the land management agency to auction the real estate assets of loss-making companies and will get 0.5% of the value realised from such sales as fee, subject to a cap of Rs 1 cr. The agency will determine the current land use and its suitability for industrial, manufacturing or other purpose, according to the guidelines.
Some banks said the government should consider mixed use of land instead of focussing on low-cost housing. “Such projects should have a long-term revenue model,” said an executive with a state-run lender.
A recent RBI report had pointed out that shortage of suitable low-cost land within the city limits and the long drawn out statutory clearance processes affect pace of building affordable housing.