Karnataka plans new home scheme, to pay loan interest

In order to meet Prime Minister Narendra Modi’s ‘housing for all by 2022’ target, the state government is planning an elaborate ‘on-demand’ housing facility that authorities believe will hasten the process of providing shelter and also do away with brokers.

Housing is one area Chief Minister B S Yediyurappa has identified as priority, what with Karnataka home to 25.36 lakh rural households that do not own a house or land. Plus, about 11 lakh urban families have sought housing under the Pradhan Mantri Awas Yojana.

Under the proposed plan, the homeless who apply for housing will be linked with banks for home loans, with the government taking care of the interest payment for a 12 to 15-year period. This is unlike existing housing schemes under which the government gives financial benefit directly to the beneficiaries to construct homes.

“What we mean by ‘on-demand’ is that anyone can apply for the housing facility at any point,” an official involved in the conceptualisation of the plan said. “The government will then link the applicant with banks and facilitate a home loan whose interest the government will pay. If the beneficiary is an SC/ST, we have a provision to cover the premium as well.”

The government will need an estimated Rs 25,000 crore to provide 100% housing, but setting aside such largesse has been ruled out keeping the state’s finances in mind. “Also, the current speed at which we are constructing affordable homes under various schemes is not sufficient to meet the 2022 deadline,” the official explained.

The on-demand housing plan, which took shape in the Chief Minister’s Office (CMO), has now reached the Finance department for vetting.

If the plan comes through, then the Rajiv Gandhi Housing Corporation Ltd (RGHCL) is likely to anchor it. “RGHCL has Aadhaar-linked data since 2011, which will help us check if someone already possessing a house is seeking another house,” the official pointed out.

The ‘on-demand’ housing plan will mainly cater to BPL households, but sources say even the APL families will be eligible with some conditions.