Govt's 'housing for all' scheme can give Rs 15 trillion boost to GDP, report says
The Centre’s housing for all project is expected to give the economy a Rs 15-trillion boost over the next 7 years, but its success will depend on ramping up existing urban infrastructure, fast tracking approval process and targeting the actual beneficiary, a study said.
“The direct benefit of the housing for all scheme to the economy is estimated to be Rs 15 trillion in a seven-year timeframe (FY16-FY22),” according to a report prepared by India Ratings. Funding the sizeable investment through public-private partnerships and ramping up the supply of raw materials for construction, namely steel and cement, were cited as ‘big challenges’ for the execution of the scheme.
Municipal services such as supplying piped water, sewerage, sanitation and solid waste management are also not equipped to take on a project of this magnitude in the next seven years, the rating agency said. The economic impact of the scheme will be felt at the state level, the report noted and added that the biggest beneficiaries will be Uttar Pradesh, followed by Maharashtra and West Bengal, States where there is maximum housing demand.
The plan is expected to increase employment opportunities and help grow the services sector, it added. Allied sectors to construction, such as cement, iron and steel, will also grow, depending on the strength of the forward and backward linkages of the construction sector with the rest of the economy.
The Modi Government’s ambitious scheme, aimed at providing 20 million houses in three phases over FY16-FY22, has a Central grant component (Rs 1 lakh per slum household) going to the states, while and Central assistance (Rs 1.5 lakh for other households) is likely to go directly to households, the report said.
Also, the Central Government would provide interest subvention to households at 6.5 per cent for loans up to a 15-year tenor through two nodal agencies – Housing and Urban Development Corporation and National Housing Bank.
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