Rs. 41,765 Crores Allocated for MOHUA for 2018-19 – An Increase of Nearly 3% Over Last Year’s Budget

Feb 06,2018

Shri Hardeep S. Puri, Minister of State (I/C) for Ministry of Housing & Urban Affairs today informed that Rs. 41,765 crores have been allocated to the Ministry during 2018-19 as against Rs. 40,617 crores during 2017-18 which translates into an increase of nearly 3% in gross Budgetary support.  Briefing the Media persons on the Budget allocation to his Ministry, Shri Puri informed that the outlay for PMAY (Urban) has been increased by Rs. 25,000 crore in extra budgetary resources for the implementation of PMAY in the financial year 2018-2019. It will be raised outside general budget. Budgetary support is Rs.6500 crore which translates into an effective enhancement of 520% over previous year.  The coverage in PMAY(U) is in 4,320 cities which includes 472 Class – 1 cities.  Around 37.45 lakh dwelling units in 7,474 projects with an investment of Rs. 2,03,752 crore involving Central assistance of Rs. 57,681 Crore have been accepted under PMAY in the last 31 months.  Out of this, 19.49 lakh houses have been grounded and 3,19,648 houses have already been completed.  A total of 2,78,267 houses have been occupied, he informed.

Union Budget 2018-19 builds on the key initiatives of the Government in the affordable housing sector and real estate and the past Union Budgets. The quantum of funds required to adequately meet the low cost housing has gathered momentum with the above progress and increased scope of PMAY(Urban).  The announcement of a dedicated “Affordable Housing Fund” will go a long way in meeting this requirement.  NHB will be working out the modalities for quick operationalization of the Fund.

Some of the Recent Initiatives include: -

Expansion of Scope

The scope of the Credit Linked Subsidy Scheme (CLSS) for EWS/LIG has been expanded to include the Middle-Income Group (MIG) w.e.f 01.01.2017 covering two income categories between Rs. 6 lakh and Rs 12 lakh (MIG-I) and between Rs. 12 lakh and Rs. 18 lakh (MIG-II) household income.  For MIG-I, an interest subsidy of 4% for loan amounts up to Rs 9 lakh and for MIG-II, an interest subsidy of 3% for loan amounts up to Rs. 12 lakh is available to eligible persons/households.
Increase in carpet area

In another major initiative, the Central Government has also increased the carpet area of 90 square metre to “up to 120 square metre” in respect of MIG I and, in respect of MIG II from 110 square metre to “up to 150 square metre”.
Increased coverage

Keeping in view feedback from various stakeholders and State Governments, the Central Government has also recently increased the coverage under PMAY(Urban) to include areas falling within notified Planning/Development area under the jurisdiction of an Industrial Development Authority/Special Area Development Authority / Urban Development Authority or any such Authority under State legislation which is entrusted with the functions of urban planning and regulations.
The additional burden of Capital Gains on Real Estate Transactions owing to the difference between circle rate or sale consideration has been rationalized as no adjustment will be required if the circle rates do not exceed 5% of the sale consideration price. This would facilitate smoother real estate transactions.

Other recent Initiatives

The GST council had recently announced a lowering of GST rate from 12% to 8% (after deducting one third of the amount charged for the house towards cost of land) for the houses constructed or acquired under the CLSS vertical of PMAY-Urban covering EWS, LIG, MIG I and MIG II and has been in effect from January 25, 2018. This concessional rate is already applicable to the other three verticals of PMAY (Urban) viz. In Situ Slum Rehabilitation, Affordable Housing in Partnership and Beneficiary Led Construction. Thus, most of the housing projects in the affordable segment in the country would now attract GST of 8% (after deducting value of land).

The recently revised FDI Circular (Jan 10, 2018) permits FDI to Real Estate Brokering Service. This would further professionalise the Real estate sector with more organised corporate entities getting into the sector. 

Overall, the Union Budget coupled with the recent initiatives will have a positive impact on the Housing and Real Estate Sector in India.

SWACHH BHARAT MISSION - URBAN

Rs. 2500 crore have been allocated under the SBM during 2018-19 which translates into an increase of 8.69% over last year’s allocation. As far as SBM-Urban is concerned, as against the Mission period target of 66 lakh in IHHL, 80% toilets, i.e. nearly 52 lakhs have been constructed and / or under construction. Balance of 13.4 lakh units of IHHL is expected to be completed by October 2018. SBM Urban also targets to construct 5.02 lakh seats of community/public toilets during the Mission, against which 3 lakhs seats have been constructed or are under construction (i.e. 64%). Construction of the balance 1.8 lakh seats of community / public toilets are expected to be completed before 2nd October 2018.

SMART CITIES MISSION

An amount of Rs 6169 Crore, which is 54.2% over last year’s allocation has been proposed during 2018-19 under the Smart Citis Mission. The Government of India launched the Smart Cities Mission in June 2015. Under the Mission, 99 cities have been selected so far. While  20 cities were selected in Round 1 in January 2016, 13 cities in Fast-track Round in May 2016, 27 cities in Round 2 in September, 2016, 30 cities in Round 3 in June 2017 and 9 cities in Round 4 in January 2018.

A total investment of Rs. 2,03,979 crore has been proposed by these 99 smart cities in their Smart City Plans. So far,

86 Smart Cities have incorporated their Special Purpose Vehicles (SPVs) and 62 Cities have procured PMCs. Till now projects worth
Rs. 5,265 crore have been fully or partially completed.
 Work Orders have been issued for projects worth Rs. 15,992 Crore (under implementation),
tenders issued for projects worth Rs. 19,070 crore and
projects worth Rs. 98,989 crore are under DPR stage.
 

AMRUT

Rs 6000 crores have been allocated for the AMRUT mission during 2018-19 as against last years allocation of Rs 5000 crore which is an increase of 20%. Till 31st January 2018, the implementation status of the Mission is as under:

Work on 308 projects worth Rs.186 crore have been completed.
Contracts for 1,632 projects worth Rs.34,187 crore have been awarded.
Furthermore, 784 projects worth Rs. 12,903 crore are at tendering stage, DPRs have been approved for 1,159 projects worth Rs. 11,178 crore and DPRs for 871 projects worth Rs.14,014 crore are under preparation.
Sector wise break up

In the water supply sector, contracts for 512 projects worth Rs. 19,919.48 crore have been awarded and 27 projects worth Rs.24.49 crore have been completed. NITs have been issued for 154 projects worth Rs.5394.67 crore and DPRs for 234 projects worth Rs. 5,183.84 crore have been approved.
In the sewerage and septage management sector, contracts for 283 projects worth Rs. 12,974.21 crore have been awarded and 3 projects worth Rs.4.71 crore have been completed. NITs have been issued for 78 projects worth Rs.56054.68 crore and DPRs for 118 projects worth Rs. 4,329.39 crore have been approved.
In the drainage sector, contracts for 42 projects worth Rs.565.75 crore have been awarded and 9 projects worth Rs.3.68 crore have been completed. NITs have been issued for 37 projects worth Rs.697.25 crore and DPRs for 181 projects worth Rs.978.64 crore have been approved.
In the urban transport sector, contracts for 76 projects worth Rs.233.29 crore have been awarded. NITs have been issued for 57 projects worth Rs.375.04 crore and DPRs for 111 projects worth Rs.323.36 crore have been approved.
In the green spaces and parks sector, contracts for 719 projects worth Rs.497.75 crore have been awarded and 268 projects worth Rs.152.8 crore have been completed. NITs have been issued for 458 projects worth Rs.381.81 crore and DPRs for 515 projects worth Rs.362.52 crore have been approved.
Credit rating: Credit rating work for 482 cities has been awarded and credit rating has been completed in 366 cities. Out of these 366 cities, 144 cities have received Investible Grade Rating (IGR), including 29 cities with rating of A(-) and above which is considered good for issuance of municipal bonds.

Furthermore, Transaction Advisors (TAs) have been appointed in 144 AMRUT Mission cities to enhance credit worthiness and/ or floating municipal bonds.

LIVEABILITY AND EASE OF DOING BUSINESS IN CITIES

The Government of India along with the various State and Local Governments is implementing several flagship Urban Missions. An overarching goal of the various missions and schemes is to make Indian cities more ‘Livable’. In order to develop a common minimum framework for cities to assess their existing status and chart their pathway towards providing a better quality of life to their citizens, the Ministry of Housing and Urban Affairs has developed a set of ‘Liveability Standards in Cities’ to generate a Liveability Index and rate cities. The framework has its genesis in the 24 Smart City features contained in the Smart City Proposals and includes 79 indicators (57 Core Indicators and 22 Supporting Indicators). These indicators are organized in 15 distinct ‘Categories’, designed for measuring various institutional, social, economic and physical aspects that affect the quality of life of citizens and determine the ‘Liveability’ of a city.

MoHUA through an international bidding process under World Bank funded CBUD programme has selected M/s IPSOS Research Private Limited in consortium with M/s Athena Infonomics India Private Limited and Economist Group Limited for assessment of liveability indices in 116 cities. The exercise is scheduled to be completed by June, 2018 and Ministry will be able to issue liveability indexes of the 116 selected Cities.

In the World Bank’s Doing Business Report 2018, the rank of the country has improved from 130 to 100. To facilitate Ease of Doing Business in Construction Permits, Online Building Plan Approval System (OBPAS) with features like common application form, online fee calculator, provision for obtaining NOCs online etc., has been implemented in Delhi and Mumbai with integration of various external and internal agencies. As a result of this, the number of procedures has been reduced to 8 and timelines reduced to 30 days.  Ministry of Housing and Urban Affairs has been coordinating with Department of Industrial Policy and Promotion and both the Municipal Corporations of Mumbai and Delhi to ensure that various reforms implemented are experienced on ground so as to improve Ranking for Doing Business Report, 2019.

 Both Municipal Corporation of Delhi (MCD) and Municipal Corporation of Greater Mumbai (MCGM) are organizing the stakeholder consultations to elicit feedback from Architects, Engineers and Developers on the efficacy of online building plan approvals and to improve the system further.  The Ministry is also conducting third party evaluation of the system to identify the bottlenecks in the system and to address these issues. Pro-active steps are being taken to implement Online Building Plan Approval System (OBPAS) in all AMRUT cities. States like Andhra Pradesh and Telangana have already implemented OBPAS in all the urban local bodies. Besides these states, Madhya Pradesh, Chhattisgarh, Gujarat, Jharkhand, Maharashtra, Kerala and Rajasthan have also made considerable progress in implementing OBPAS.  The remaining States are also in process of implementing the OBPAS.

HRIDAY

The HRIDAY Scheme was launched on 21st January, 2015 for a duration of 4 years ending November, 2018. The total outlay of the Scheme is Rs. 500 Crores.  A cumulative expenditure of Rs. 237.14 crores have been made till date. The Ministry has been allocated Rs. 161.5 Crores for FY 2018-19 which is an increase of 7.67% over last year. 12 projects will be completed by March 18 and all 51 projects are targeted to be completed by Nov 2018.  After the midterm appraisal made by a Group of Secretaries, it was recommended that the PRASAD scheme of M/o Tourism may be merged with HRIDAY. The Hon’ble Ministers of Tourism and Housing & Urban Affairs concluded that HRIDAY is a close ended pilot scheme which is coming to end in November, 2018. Thereafter the HRIDAY scheme will cease to exist and only PRASAD scheme should take care of various infrastructure developments at Heritage/ Pilgrimage places.