Affordable Rental Housing Complex accorded infrastructure status

Shishir Sinha New Delhi | Updated on August 29, 2020

The Housing Ministry’s guidelines are a shot in the arm for affordable rental housing complexes

Will help in getting long term investment as investors can also avail tax benefit

Finance Ministry has included ‘Affordable Rental Housing Complex’ (ARHC) under Harmonised Master List of Infrastructure Sub-sectors. This will help in getting more investment even from Sovereign Wealth Fund and Pension Fund and long-term finance from bank and financial institutions at easier terms

“Affordable Rental Housing Complex is included in the Harmonized Master List of Infrastructure Sub-sectors by insertion of a new item in the category of Social and Commercial Infrastructure,” a notification issued by Economic Affairs Department of the Finance Ministry said. ARHC was announced under part of Aatma Nirbhar Bharat Abhiyaan announced in May this year.

Benefit of inclusion

With the inclusion of ARHC, number of sub sectors has reached 34 under five categories (Transport & Logistics, Energy, Water & Sanitation, Communication and Social & Commercial Infrastructure) in the harmonised list. All these are eligible to raise money from sovereign wealth fund, pension funds, insurance companies, with a longer tenure and on easier terms. Cheaper credit through External Commercial Borrowing Route (ECB) will also be available. Investors investing money in these sectors will get tax benefit.

What is ARHC

ARHC means a project to be used for rental purpose only for urban migrant/poor (Economically Weaker Section/Lower Income Group categories) for a minimum period of 25 years with basic civic infrastructure facilities such as water, sanitation, sewerage/septage, road, electricity along with necessary social/commercial infrastructure. Initial rent will be fixed by local authority/entities based on local survey of surrounding area wherein the project is situated. Project means a listed project having at least 40 dwelling units of double room or single room or equivalent dormitory units or a mix of all three in any ratio but not more than one third of total built up area under double bedrooms units.

Dwelling Units (DUs) means a unit comprising of double bed room with living area, kitchen, toilet and bathroom of up to 60 square metres carpet area or single bed room with living area, kitchen, toilet and bathroom of up to 30 square metres carpet area. Dormitory Units means a set of 3 dormitory bed with common kitchen, toilet and bathroom in 30 square meters carpet area meaning 10 square meters carpet area per dormitory bed.

ARHC intends to help migrant labour/urban poor face challenges in getting houses at affordable rent. As a part of PM Awaas Yojana, the scheme will provide ease of living by converting government funded housing in the cities into ARHC under PPP (Public Private Partnership) mode through concessionaire. The scheme will incentivize manufacturing units, industries, institutions, associations to develop such complex on their private land and operate. There is also provision to incentivize State Government Agencies/Central Government Organizations on the similar lines to develop ARHC and operate.

Published on August 29, 2020

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