Maharashtra government plans affordable housing policy

MUMBAI: The Maharashtra government is soon going to come out with a new housing policy that will make 'affordable homes' a reality, a move that offers hope to low and middle income categories for owning such a house.

The state government has decided to create a 'housing fund' for the not-so-wealthy sections of the society -economically weaker sections (EWS), low income group (LIG) and middle income group (MIG).

A state government employee or even those working in the private sector can become a member of this fund by con tributing Rs 1,000 a month to this fund for 10 years, which will then be invested in RBIspecified securities. The member will not have to go through the mandatory MHADA lottery process when he applies for a flat later on.

According to housing department officials, those who contribute to the housing fund won't have to pay the entire cost of the MHADA flat as the amount would be adjusted from his contribution to the housing fund.

The state government has also decided to approach the central government to give tax exemption to contributions made to this fund.

Bank for TDR

The state is also planning to set up a 'bank' for Transferrable Development Rights (TDR). It will use TDR as far as possible to take over private land for building infrastructure. In return, those parting with their land would get TDR up to 225% of the land. TDR would also be sold electronically. The state government is 'exploring' the possibility of making TDR a financial instrument that could be freely tradable on the stock exchange, and is talking to Sebiin this regard.

The state housing department is also proposing that developers, who build projects for EWSLIG and MIG and qualify for tax incentives under Section 35 (AD) Rule 11OA of the Income Tax Act, will be 'eligible' for a 300% additional FSI.

The developer would, however, have to pay the state a premium for this additional FSI at 60% of the ready reckoner rate (RRR). The developer would also have to hand over 10% of the total constructed flats to MHADA. The state government is going to come out with such a policy in the next 90 days.

Apart from these initiatives, the state is also planning to rope in nationalised banks and housing financial institutions to provide loans for housing finance at 'reasonable rates'.The state is planning to provide a tax concession to such housing finance companies and is even thinking of paying part of the loan as interest subsidy if these companies give loans at reduced rates.

Among the other initiatives, private developers who are building luxurious projects, would have to mandatorily set aside 20% of the built-up area for EWS and LIG housing.

The state has also realised that many firms build offices, but don't arrange for staff accommodation near their offices. In order to correct this, the state plans to give concessions to employers on their VATstamp duty and profession tax if they build houses for their employees near their work places.