In a big push to cost-effective housing, the finance minister announced the extension of the tax vacation to the segment till March 2022. Income tax exemption has also been provided for notified ‘affordable rental’ housing projects.
The challenge of housing for urban migrants/poor in India came to the fore throughout the nationwide lockdown final year. In the wake of the Covid-19 pandemic, unprecedented reverse mass-migration ensued. Tens of thousands of migrants and poor had been observed on India’s highways, walking back hundreds and thousands of kilometres to the safety of their properties in rural regions.
It spurred a re-imagination of the want for cost-effective rental housing as the mainstay of the migrant workforce in the cities. The Cabinet authorized the Affordable Rental Housing Complexes (ARHCs) scheme. As a sub-scheme of the Pradhan Mantri Awas Yojana–Urban (PMAY-U), it ties in with the Atmanirbhar Bharat vision, as well.
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ARHC marks a strategic shift from ownership-based intervention to a rental-based social housing scheme, and corrects the historical negligence of the very important productive force of migrants. The beneficiaries of ARHCs will be varied groups of urban migrants and poor, which includes industrial and building workers, migrants working with industry/trade associations, educational/wellness institutions, hospitality sector, extended-term vacationers/guests, students or any other category as deemed match by the states/UTs.
The scheme will be implemented by way of two models. In Model 1, current government-funded (central and State) vacant homes will be utilised by converting them into ARHCs administered in the PPP mode or by way of public agencies, which will operate them for a concession period of 25 years. In Model 2, public/private entities will construct, operate and preserve ARHCs on their personal offered vacant land for a period of 25 years. In order to safe the interest of intended beneficiaries, ARHCs projects will have a mix of single-bedroom homes with living location, kitchen, toilet and bathroom and dormitories. It will also provide for the building of—subject to a cap of one-third of all dwelling units in the project—double-bedroom units with living location, kitchen, toilet and bathroom, to address the requirement of these with households.
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ARHC has been developed just after a series of consultations with stakeholders and is a win-win proposition for each the urban migrants as effectively as private entities. It will attract investment and entrepreneurship to the rental housing sector. The government has extended the advantage of project finance credit facility at a decrease interest price by way of a concessional window by inclusion of ARHC in the harmonised master list as an infrastructure sub-sector. Further, with RBI permitting the challenge of extended-term bonds by banks for financing of infrastructure and cost-effective housing, extended-term project loan specifications for this segment at a decrease interest price will be facilitated. Entities can also avail loans at decrease prices from banks beneath priority sector lending or from housing finance providers by way of the Affordable Housing Fund (AHF). Refinance beneath AHF, from the National Housing Bank, will also be offered to eligible institutions. The internal price of return is projected at 12-14% as a outcome of this capital infusion.
ARHC also addresses the crucial want for unlocking the possible of the land offered with public and private agencies by relaxing land-use norms, exactly where portion of it can be utilised for rental goal and rest for industrial use. Finding appropriate land in the city close to the centres exactly where migrants work/study is fraught with challenges. ARHCs will outcome in worth-capture of the land. In addition, a host of incentives and advantages are getting extended to the entities such as concessional project finance, exemption in earnings tax & GST, use-permission alterations for homes on vacant land and absolutely free 50% added FAR/FSI trunk infrastructure up to the project internet site, municipal charges on a par with residential home, and single- window and time-bound (inside 30 days) approval of all ARHC projects are other measures to facilitate the segment. Moreover, a Technology Innovation Grant (TIG) of `600 crore has been provisioned to market small business innovation by utilizing option building technologies.
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ARHCs will avoid the proliferation of slums, apart from addressing the difficulties of wellness, hygiene and productivity of migrants and their households. They will lead to accountable entrepreneurship and fulfilment of ethical duty towards the ‘less privileged’, and this tends to make them a crucial step in inclusive development.