NHB 1 New Delhi By Lalit Kumar Dy. General Manager Dy. General Manager National Housing Bank National Housing Bank Pro-Poor Affordable Housing “Policy and Regulatory Strategies”

NHB 2 Outline  Housing in India : The Context  New Initiatives  Policy and Regulatory Strategies

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4 Housing Shortage during  In Urban Areas, more than 97% of the total housing requirement i.e million units required for poor and low income segment households (As per MH&UPA, GOI)  In Rural Areas, more than 90% of the total housing requirement i.e million units required for BPL Households. (As per Working Group Report on Rural Housing, MORD, GOI)  Average Per annum Funds Requirements during = Rs.1,20,00 crores Estimated Housing Requirements during Urban Areas26.53 million units (24.71 million in 2007) Rural Areas47.43 million units Total (All India)73.96 million units Growth of housing finance is about 30% during last three years But, housing requirements for poor/EWS increased Need to not only develop New Financial Architecture but also Policy and Regulatory Framework for Affordable Housing on sustainable lines for poor/EWS

NHB 5 Therefore, “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little”.

NHB 6 Affordable Housing for poor/EWS Future Theme  Development of Market based Housing Finance System focusing on Unserved and Underserved segments  To bring appropriate changes in policy & regulatory framework  Catalyze Increased Investment through Private Sector Participation/Builders Objective  To reduce housing shortage for poor/EWS  To introduce customised housing cum income generating products for poor/EWS

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8 Recent Initiatives Jawahar Lal Nehru Urban Renewal Mission (JnNURM) for bringing appropriate policy and legal reforms for providing affordable housing to poor/EWS Interest Subsidy Scheme for Urban Poor Top up Loan Scheme Emphasis on Public Private Partnership focusing on housing for poor/EWS Thrust of Policy Initiatives : Affordable Housing

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10 …Future Policy and Regulatory Strategies For Poor/EWS Individuals/Families  Transparency in identification of beneficiaries under Govt. sponsored Schemes  Land be provided by Govt. Free of Cost/at affordable rates  Complete Waiver of Stamp duty on Registration on plot/house/flat  Restriction on resale/transfer of Land/House/Flat allotted to Poor/EWS for atleast for 10 years  Customised housing cum Saving linked/insurance linked/income generating loan products be introduced.

NHB …Future Policy and Regulatory Strategies For Government/Institutions  Government/RBI/NHB  Setting up of Risk Fund to cover housing loans to be given to Poor/EWS  Premium on such risk covers be borne by the Govt.  National Shelter Fund be set up for providing lesser cost refinances to FIs for such loans  A part of Insurance Funds be allowed to be tapped by Fis & such loans be classified as Investment in Govt. Securities  Risk Weight on housing loans to poor/EWS should carry lesser weight say 25% instead of 50% or 75% depending on LTV  The time limit for recognising such loans as NPAs be increased to 180 days instead of 90 days  Fixing of sub-targets within the ceiling of priority sector lending for poor/EWS 11

NHB …Future Policy and Regulatory Strategies  Public Agencies  Public Agencies should be strengthened to continue to acquire land and build houses/flats for Poor/EWS  Financial Institutions  Income from housing loan financed to poor/EWS be exempt from income tax and/or  The limit for creation of special reserve under 36 (1)(viii) be revised to 40% wherein specifying 20% from Poor/EWS financing  The benefit of Section 36(1)(viii) be allowed to banks also  FIs be allowed to tap funds from multinational agencies  Specific portion of long term funds from Insurance Companies be directed for poor/EWS housing to be raised by FIs  Risk Mitigants be introduced to cover smaller loans without any cost to FIs 12

NHB …Future Policy and Regulatory Strategies  Public Private Partnerships/Builders  Encourage housing projects with “High Volume –Low Margin” concept for poor/EWS  Conversion/Development charges or any other cess/charges levied by Govt. be waived  Additional FSI equal to Poor/EWS housing projects be allowed in other housing projects  No VAT/taxes on the building material used for Poor/EWS housing projects 13

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