Accommodation Times News Services
By Nikita Parekh & NImisha Gupta
HUDCO is a Public Sector Company, under the Ministry of Housing & Urban Poverty Alleviation (MoHUPA), HUDCO has been a key partner with the Government in building assets for the Nation. In its operations, HUDCO lays a considerable emphasis on the housing need of the ‘deprived’ i.e Economically Weaker Sections (EWS) and Low-Income Groups (LIG). To elaborate more on HUDCO’s functioning and role in providing housing Accommodation Times, got in conversation with Dr. M. Ravi Kanth, IAS (r) Chairman & Managing Director, HUDCO.
Ans. HUDCO has the mandate of providing long-term finance for housing projects in the country, especially for EWS & LIG segments of the society. With a pan-India presence, HUDCO has emerged as a major player in housing finance over the last 44 years offering a wide range of financing options and services. For housing, HUDCO finances and supports a broad spectrum of housing activities such as Urban, Rural & Staff Rental Housing, Land Acquisition schemes, etc., undertaken by the State Public Organisations and Housing Projects under JNNURM for meeting the State/ ULB contribution (Viability Gap Funding) as well as Retail Financing to individuals, through HUDCO Niwas.
Till end August 2014, cumulatively, HUDCO has sanctioned 14,849 housing schemes with a loan component of Rs.46,009 crore for housing projects in the country. Over 95% of the total houses supported by HUDCO have benefited EWS & LIG groups.
Towards improving access to housing for all sections of the society, especially at the Bottom of Pyramid (BoP) of the society, HUDCO has introduced two innovative products, namely, ‘Rent-to-Own’ Scheme which is a ‘rental-cum-ownership’ scheme for low-income employees of an organisation; and HUDCO Nav Nagar Yojana (HuNNY) which offers a comprehensive solution to the growing cities/towns from ‘Planning to Financing’ sustainable habitats.
To promote micro-finance in Housing, HUDCO is participating in the form of equity contribution to Sewa Grih Rinn Limited to the tune of Rs.1.8 crore, which is new Micro Housing Finance Company set up by Self Employed Women’s Association (SEWA). HUDCO would ensure financial inclusion of the women members of SEWA, who have so far been denied the benefit of home loans through the formal lending mechanism.
Q.2. What is HUDCO’s priority providing better infrastructure or housing?
Ans. HUDCO has the mandate to reach the unreached segment of the society by providing long-term finance for housing and urban infrastructure. HUDCO gives equal priority to each of these sectors, as infrastructure and housing are complementary to each other. Housing without proper and sustainable infrastructure is incomplete.
Q.3. The new government at Centre has initiated housing for all by 2022, what initiatives HUDCO is taking to fulfill this aim?
Ans. In the light of the significant deficit for housing in the country and need for massive efforts to achieve the objective of housing for all by 2022, HUDCO is fully geared up to take up the challenge of providing affordable housing in the country through taking care of financing need of these projects being taken up by Govt. organisations, State Govt. Bodies such as Housing Boards, Development Authorities, etc. HUDCO’s Corporate Plan-2020 envisages a major focus and thrust on social housing in order to achieve the national goal of affordable houses for all.
Also, HUDCO has been a significant partner in assisting in the implementation of ‘Government of India Action Plan Schemes’, such as the Two-Million Housing Programme (2 MHP), Valmiki-Ambedkar Awas Yojana (VAMBAY), Interest Subsidy Scheme for Housing the Urban Poor(ISHUP) which has been rechristened as ‘Rajiv Rinn Yojana’ (RRY), and ‘Affordable Housing in Partnership’ Scheme.
HUDCO has so far financed more than 16.53 million housing units in the country and every 16th house in the country is financially assisted by HUDCO. Also, HUDCO has set internal “Mission 5 Ones” in which one of the missions is to sanction 1 million housing units every year. In the last financial year i.e. 2013-14, HUDCO had successfully achieved its goal by sanctioning 1.43 million housing units.
Q.4. Last year HUDCO had launched a new scheme ‘Rent to Own’ for government employees, what is the success rate of the scheme?
Ans. HUDCO has introduced a new Scheme called, ‘Rent-to-Own scheme’ which is a ‘rental-cum-ownership’ scheme, which is designed to facilitate an agency to initially avail loan from HUDCO on behalf of its identified lower level employees for the scheme and would allot the houses to its employees initially on rental basis. The employee would become the ‘owner’ of the house, as and when the full cost of the house is paid to the Agency. This scheme would benefit the lower-level employees of the agencies. Many of the State Government Agencies, such as Police Housing Corporations, etc., are showing their keen interest in the “Rent-to-Own” scheme.
Q.5. Is HUDCO planning any such scheme for common people?
Ans. Yes. This scheme can also be modified to suit the requirements of the weaker sections of the society and slum households, and if the agencies constructing such houses approach us, we may consider extending finance to these public agencies, like DUSIB, for construction of affordable housing under “Rent-to- Own” scheme.
Q.6. In the financial year 2013-14 HUDCO had witnessed 22% rise in loan disbursement towards urban infrastructure and housing projects, how much disbursement are you expecting in the current financial year?
Ans. For the current FY 2014-15, HUDCO has a annual target of Rs.16,100 crore for sanctions and Rs.7,300 crore for disbursement. In the first quarter, we have achieved sanction of Rs.2,973 crore against the set target of Rs.2,415 crore, which is 123% of the 1st Quarter sanction target. In addition we have disbursed Rs.1,271 crore against the set target of Rs.1,095 crore which is 116% of the 1st Quarter disbursement target.
We are positive to continue our efforts for a similar performance for the next quarter and for the FY 2014-15 as well, towards achieving “Excellent rating” from DPE- four years in a row!
Q.7. When can we expect the next tax free bonds from HUDCO?
Ans.: HUDCO is continuously taking up the matter with Ministry of Finance through Ministry of Housing & Urban Poverty Alleviation and requesting for Tax Free Bonds to supplementing Govt. of India mission of ‘Housing for All by 2022’.
Q.8. Any new scheme HUDCO is planning to launch this year?
Ans. As per Census 2011, India had about 98 million seniors above the age of 60 years, a significant increase of 29% from the 2001 figure of 76 million. In line with HUDCO’s mission to provide sustainable and inclusive living environment, HUDCO is in the process of devising a new product this year for senior citizens in the name of “Senior Citizen Housing” to address senior citizens housing needs, in order to provide dignified, safe, socially-enriching living environment safeguarding the rights of senior citizens in their sunset years. This will be implemented in all the cities and the ULBs /State Agencies have freedom to approach HUDCO, and avail financing under the scheme.
Q.9. What are your future expansion plans?
Ans: It is my firm view that HUDCO would continue to intensify its role as the largest facilitator of housing delivery, with particular reference to the weaker sections of the society. With the major programmes being conceived for “Housing for all by 2022” and also for the development of smart cities throughout the country, HUDCO’s role would continue in the fields of project funding, project monitoring, evaluation studies and also support to the Urban Local Bodies in conceiving city specific business plans for sustainable development. I am sure that HUDCO would emerge as the single largest CPSE and one stop shop for everything in the field of housing and urban development for promoting cleaner, greener, healthy and smarter cities.