Labour Ministry plans affordable housing scheme for EPFO subscribers

NEW DELHI: The labour ministry is preparing a mega housing scheme to offer affordable houses to over 5 crore subscribers of retirement fund body EPFO in the backdrop of the government’s mission ‘Housing for all by 2022’. The ministry intends to collaborate with PSU banks, housing finance companies, state-owned construction firms like NBCC and authorities like DDA, PUDA, HUDA to build houses at a price to be fixed by the government.

"Labour ministry is preparing a scheme under which affordable houses will be provided to the Employees’ Provident Fund Organisation (EPFO) subscribers, particularly those who are in the low-income bracket," a source in the ministry said.

At present, there are over 70% EPFO subscribers whose basic wages are less thanRs 15,000 per month. In a recent note, the Prime Minister’s Office had asked EPFO to promote affordable housing for its subscribers and use its funds for the purpose.

According to the note, deployment of 15% of EPFO funds as loan for lowcost housing would generate a credit flow of Rs 70,000 crore and can create 3.5 lakh additional low-cost homes. EPFO currently manages a huge corpus of Rs 6.5 lakh crore and its annual incremental deposit is in excess of Rs 70,000 crore.

The labour ministry is keen on a scheme under which EPFO subscribers could withdraw their PF deposits to make part-payment of the total cost of the house. At present, EPFO subscribers can withdraw money from their PF accounts for buying houses only after contributing for a period of five years in the schemes run by the body.