Maharashtra govt plans to start 'housing fund'
The move will encourage people to save for a house and to some extent housing finance will get a boost
May 05, 2015
Source : Business Standard

 

Mumbai: In a bid to make homes more affordable for people in Maharashtra, the state government is planning to start a 'housing fund' , where one can contribute a fixed amount of monthly earning for a certain period.

In its yet-to-be-released housing policy, the state housing department has proposed a housing fund, where a self- employed person or a government or private employee desirous of becoming a member, can contribute a fixed percentage of his/her salary in this fund, which will be managed by a fund manager chosen through competitive bidding.

"In case the qualifying person is employed in the private or government sector, then in such a case the employee will have the option to make a matching contribution from his/her provident fund (PF) account upto 50 per cent," the recommended policy states.

"For example, if an employee contributes Rs 1,000 to the housing fund and his/her contribution to the PF is normally Rs 2,000 then he/she can reduce the PF Contribution to Rs 1,000 and contribute the balance amount of Rs 1,000 to the housing fund," it further states.

An official from the department said the membership count of the housing fund will indicate the number of people in need of housing and added that the contributions shall be invested in RBI specified government securities.

"After 10 years of contribution, the employee can apply for a house in a government scheme and the balance in this fund to his credit shall be his share of the cost towards the house and the balance amount can be borrowed," the policy states.

The official said this will encourage people to save for a house and to some extent housing finance will get a boost.

The housing fund also proposes to offer interest equivalent to a PF account and the state government will approach the Centre to make contributions to it tax-free.

According to the policy, the members of this fund will have priority in eligibility in Maharashtra Housing And Area Development Authority (MHADA) draw for sale of flats.

In case the members of the 'Housing Fund' intends to buy a house from the private sector, the fund proceeds can be utilised for the same also.

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