The Ministry intends to collaborate with PSU banks, housing finance companies, state-owned construction firms like NBCC and authorities like DDA, PUDA, HUDA to build houses at a price to be fixed by the government.

"Labour Ministry is preparing a scheme under which affordable houses will be provided to the Employees' Provident Fund Organisation (EPFO) subscribers, particularly those who are in the low income bracket," a source in the ministry said.

At present, there are over 70 percent EPFO subscriberswhose basic wages are less than Rs 15,000 per month.

In a recent note, the Prime Minister's Office had asked EPFO to promote affordable housing for its subscribers and use its funds for the purpose.
    
According to the note, deployment of 15 percent of EPFO funds as loan for low cost housing would generate a credit flow of Rs 70,000 crore and can create 3.5 lakh additional low-cost homes. EPFO currently manages a huge corpus of Rs 6.5 lakh crore and its annual incremental deposit is in excess of Rs 70,000 crore.
    
The Labour Ministry is keen on a scheme under which EPFO subscribers could withdraw their PF deposits to make part-payment of the total cost of the house.
    
At present, EPFO subscribers can withdraw money from their PF accounts for buying houses only after contributing for a period of five years in the schemes run by the body.
    
The Ministry also intends to provide subsidy to the EPFO subscribers in low-income bracket to help them avail benefits of various low-cost housing schemes of the government. Financial institutions, sources said, would be roped in to provide housing loan at low interest rates under the priority sector lending for construction of affordable houses under the scheme.

The scheme, however, will be optional for EPFO subscribers as there is no need to provide affordable houses to those who already own one .

Under the housing scheme, there would three different income categories--Low Income, Middle Income and High Income. Houses and financial incentives under the scheme will be offered on the basis of the income of a subscriber. The subscribers would be facilitated to pay equated monthly installments of the their home loan through their provident fund account.

The source said that under the scheme EPFO may use its funds to create a corpus for provide housing loan at affordable interest rate to its subscribers.

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