Private players get mega sops to rehabilitate slums….Smita Aggarwal
India’s large private sector is being wooed by the government to implement its mega social sector scheme, Rajiv Awas Yojana (RAY), to eradicate slums. While states would provide higher Floor Space Index (FSI), Transferable Development Rights (TDR) and rights to commercially exploit part of land for sale in open market, the Centre would provide a grant of Rs 50,000 per house to the developer, according to the proposal mooted by the Housing and Urban Poverty Alleviation ministry.
The proposed financing pattern for RAY puts half the burden on the Centre’s resources, 10-15 per cent on the states’ and rest of the 35-40 per cent on private sector’s, said a ministry official.The approach will be used for both in-situ or on site development and relocation, officials pointed out. Most of the slums in metros have come up on prime land, in and around the central business districts. The ministry expects 80 per cent of the development to take place through the in situ mode.
Under the scheme, the urban poor beneficiaries will have to shell out Rs 70,000-Rs 80,000 depending on the city for a house. “They (EWS/LIG) can also avail the 5 per cent interest subsidy on loans up to a lakh. The beneficiaries will be identified by linking the scheme with Unique Identity card, Aadhar,” said the official.
To check the growth of slums, the Centre has backed reservation of 20-25 per cent of developed land or housing units for EWS and low-income group (LIG) in any new private or public housing project. Centre’s support to states will be conditional upon states passing a legislation to this effect. The government will consider servant quarters in housing colonies under the mandatory quota for EWS/LIG section, said a senior official.
“In RAY, we want to ensure participation of the private sector in a big way. In our discussion with the leading business chambers, they have shown their willingness to participate,” said the official. The ministry has already moved the Expenditure Finance Committee with its proposal outlining the funding pattern, and is awaiting its response.
During the Twelfth Plan, the ministry has projected a requirement of around Rs 60,000-70,000 crore for the scheme. The total investment required to make India slum free would be around Rs 9 lakh crore and could take up to 15-20 years, the official added. The Planning Commission had earlier expressed its objection to the 50 per cent centre’s contribution, and had rather recommended a 40 per cent centre share.
The proposed funding pattern makes a departure from another gigantic Rs 1 lakh crore scheme, Jawaharlal Nehru National Urban Renewal Mission, launched in 2005 to bring about a change in the urban landscape of 65 cities. Under JNNURM, apart from the centre and states, local municipal bodies were to chip in funds to spruce up cities and implement the reforms. But the credit rating report of these 63 cities by independent rating agencies revealed in 2009 that none made it to the top investment grade.