It is a good news for low-income groups in the state of Tamil Nadu as Modi government, the state government and the World Bank have signed legal agreements for affordable housing. The legal agreements were signed for two projects – $200 million First Tamil Nadu Housing Sector Strengthening Programme and $50 million Tamil Nadu Housing and Habitat Development Project – to strengthen the state’s housing sector policies, institutions, and regulations.
Nearly half of Tamil Nadu’s population is urban, and this is expected to increase to 63 percent by 2030. An estimated 6 million people are currently living in slums (representing 16.6 percent of the state’s urban population).
“The $200 million First Tamil Nadu Housing Sector Strengthening Programme supports the government’s ongoing efforts to increase the availability of affordable housing by gradually shifting the role of the state from being the main provider to an enabler. It will also aim to unlock regulatory barriers and incentivise private sector participation in affordable housing for low-income families,” Ministry of Finance said in a statement.
Also, the Board also approved a $50 million Tamil Nadu Housing and Habitat Development Project to support innovations in housing finance and strengthen housing sector institutions in the state. It will finance the newly created Tamil Nadu Shelter Fund (TNSF) – an innovation in housing finance in India – by providing an equity contribution of $35 million.
The loans of $200 million and $50 million from the International Bank for Reconstruction and Development (IBRD) have a maturity of 20 years including a grace period of 3.5 years.
The loan agreements were signed by Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance on behalf of the Government of India and Junaid Kamal Ahmad, Country Director (India) on behalf of the World Bank. Whereas, the project agreements were signed by Hitesh Kumar S. Makwana, Principal Resident Commissioner, on behalf of the Government of Tamil Nadu and Junaid Kamal Ahmad on behalf of the World Bank.