THE MINISTRY of Housing and Urban Poverty Alleviation is considering introduction of subsidies, in the form of direct benefit transfer, that would be provided to economically weaker sections (EWS) and low income group (LIG) households towards their rent payments.

The draft National Urban Rental Housing Policy introduces the concept of providing housing vouchers to the urban poor, equivalent to a certain cash amount to partially offset the cost of rent incurred by them. However, the draft policy defines the Centre’s role as a “facilitator” and “enabler” for promoting rental housing. It says the Centre would “encourage states to provide subsidies for low-income tenants”.

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The draft policy borrows the income criteria used by the recently launched Pradhan Mantri Awas Yojana (PMAY). Accordingly, EWS includes all households with an annual income up to Rs 3 lakh and LIG refers to households with an annual income of Rs 3 lakh to Rs 6 lakh.

The beneficiary would be required to contribute 30 per cent of income as rent, while the subsidy scheme would account for the remaining rent amount up to a certain sum. The policy cites Census 2011 data, which shows that 27 per cent of urban residents live in rental units.

The draft rental policy is mostly prescriptive in nature and talks about the need for states to promote rental housing for specific categories. These include social rental housing with direct or indirect support from state governments for EWS and LIG segments, need-based rental housing for migrant labour, single women and students as well as market-driven private rental housing as an interim arrangement for aspiring home buyers.

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The concept of vouchers is borrowed from the US which, as part of its federal housing policy,  ....