PPP model in Affordable housing: Need of the hour



With the motive of resolving the housing shortage crisis for the major sections of people, the low-cost housing has been brought into the picture. The affordable housing schemes and projects are progressing at a faster pace. The execution of such projects have also been facing challenges that are being addressed by the government willingly. Purchasing power parity is a theory which states that exchange rates between currencies are equilibrium when their purchasing power is the same in each of the two countries. As per the PPP policy, both ownership and rental models backed by an institutional structure should result in the right kind of housing supply. The Public- Private Partnership is the new measure to speed up the execution of affordable housing segment. The central government has made a way for the private segments to contribute to the low-cost housing in the country. Ministry of housing and urban poverty alleviation (HUPA) has introduced a model for public-private partnership policy for affordable housing to serve the much-needed purpose of helping out Prime Minister AwasYojana (PMAY). Since there has been a government push for these projects, we have seen the private sectors coming to the forefront and giving in all their efforts to accomplish low-cost projects at a faster rate. Eight PPP projects have been initiated by the government till date. These projects are based on the government land. Sources say that around six PPP models have been identified in the policy. Though, the projects differ on features related to risk exposure, land ownership, etc.
“With the enactment of RERA that focuses on the timely completion of projects, we can hope for the implementation of other prospected amendments and policy introductions as well. Being a developer, we understand that the whole idea is to benefit not just the buyers but the whole majority related to the real estate market. The purpose of Public Private Partnerships is to boost implementation of affordable housing in the way that major challenges can be overpowered resulting in better outcomes. This step was much needed to ensure the participation of a majority of the private sectors. As the government has focused on improving infrastructure status for affordable housing in Budg2017-18, it has become important for the private firms to show up and contribute to the execution of the same The government is going to provide interest compensations to the private firms in order to encourage them for more such efforts in this regard. Government
benefits in the form of interest subsidy would interest more and more private sectors into the affordable housing segment” says Pradeep Aggarwal, Co-founder Chairman, Signature Global.

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