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Sick PSUs to inject life into low-cost housing scheme

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From: Financial Express By: Vinay Siwach Published at: August 13, 2017
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With the unavailability of land becoming a stumbling block for Prime Minister Narendra Modi ’s “housing for all by 2022 mission”, the government has zeroed in on vast tracts of surplus land belonging to eight sick PSUs for low-cost housing in urban areas. The ministry of housing and urban affairs (MHUA) has finalised a public-private partnership model to provide affordable housing. Under the proposal, the PSUs will either sell or lease out land to a private player, who will build low-cost houses, a senior government official said.

Launched on June 25, 2015, the aim of the Pradhan Mantri Awas Yojana – Urban (PMAY-U) is to address the gap in housing demand and supply in urban areas with respect to economically weaker sections, low and middle-income groups.

The government has set an ambitious target to construct as many as 12 lakh houses under the PMAY-U in 2017-18. In 2016-17, only 1.49 lakh houses were built under the scheme, against a target of 32.6 lakh units. The Centre has targeted construction of 26 lakh houses in 2018-19, 26 lakh in 2019-20, 30 lakh in 2020-21 and 29.80 lakh in 2021-22.

Under extant guidelines for monetisation of land of sick PSUs, proposals from government organisations are invited to purchase land. The unsold land, if any, could be auctioned by the government or be used for affordable housing and other government programmes. “This policy is being changed to give priority to Pradhan Mantri Awas Yojana –Urban, which has not made much progress so far,” another official said.



The proceeds from the land sale will be used to meet the outstanding liabilities of the PSUs, as well as implement voluntary retirement scheme for the staff before their closure or privatisation.

The selected eight sick PSUs have around 2,500 acres, including HMT Bearings in Hyderabad, Hindustan Antibiotics in Pune, Heavy Engineering Corporation in Ranchi, Indian Drugs and Pharmaceuticals in Gurugram and HMT Watches in Nainital.

MHUA has set up a four-member committee to put in place the working model. Private players would bid for the project and would be required to design the product mix and construct all dwelling units. “The entire project cost would be borne by the developer,” an official said.

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The National Buildings

Construction Corporation (NBCC) has been entrusted with the task of framing the memorandum of understanding and other legal contracts.The Central assistance approved for 23.5 lakh dwelling units is around Rs 32,800 crore, of which around Rs 10,000 crore has been released so far, officials said. Currently, of the total dwelling units approved, about eight lakh dwelling units are in various stages of completion/ construction with an estimated investment of Rs 42,160 crore.

“Completion and construction of houses are issues that have a 18-36 month time frame because constructions are huge in nature. Therefore, completion comes about gradually, whereas sanctions are much faster as this is the initial period. Construction picks up pace from the second or third year, which means from now on, construction will gather momentum,” the first official said

By Surbhi Prasad & Prasanta Sahu

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