New Delhi, Jun 2 (IANS): The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the 'Model Tenancy Act' for circulation to all states and Union Territories for adoption, by enacting fresh legislation or amending existing rental laws suitably.

"It (the model act) will help overhaul the legal framework with respect to rental housing across the country, which would help spur its overall growth," an official statement said.

The Model Tenancy Act aims at creating a vibrant, sustainable and inclusive rental housing market in the country, and to enable creation of adequate rental housing stock for all the income groups, thereby addressing the issue of homelessness.

It is intended to enable institutionalisation of rental housing by gradually shifting it towards the formal market.

"The Model Tenancy Act will facilitate unlocking of vacant houses for rental housing purposes. It is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage," the statement said.