[Urbanstudy] Govt to roll out Rs 225k cr plan to house slum dwellers

[Vinay Baindur]

http://economictimes.indiatimes.com/News/Economy/Policy/Govt-to-roll-out-Rs-225k-cr-plan-to-house-slum-dwellers-/articleshow/4883476.cms


Govt to roll out Rs 225k cr plan to house slum dwellers
12 Aug 2009, 0121 hrs IST, Sanjeev Choudhary & Bhanu Pande, ET Bureau
 NEW DELHI: In its most ambitious bid ever to house 6-crore slum dwellers
and realise the vision of a slum-free India, the government is rolling
out a massive plan to build 50-lakh dwelling units in five years across 400
towns and cities. The programme could free up thousands of acres of valuable
government land across the country and generate crores worth of business for
real estate developers.

The ministry of housing and urban poverty alleviation has sought an
allocation of Rs 225,000 crore, over one-fifth of the total budget
expenditure for the current fiscal, for the entire scheme, according to a
senior ministry official involved with the preparation of the proposal that
has been sent to the Planning Commission.

The programme, named Rajiv Awas Yojana, draws from the experience of the
government in housing the poor in urban areas under the ongoing Jawaharlal
Nehru National Urban Renewal Mission (JNNURM), but is different as it is the
first sincere attempt to rid India of slums.

The government is holding consultations with all stakeholders, including
state governments, municipalities, urban planners, NGOs and slumdweller
communities. At least 23 of the 25 states have given in-principle consent
for the programme, said the official.


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Proliferation of slums has had an adverse impact on the GDP growth for
years. Slumdwellers are characterised by low productivity and susceptible to
poor health and criminal activities. The government believes that while
better housing facilities will address those social challenges, it will also
have a multiplier effect and serve as an economic stimulus. Most
importantly, it will perpetuate the UPA government’s inclusive agenda,
buttressing its vote bank.

The programme involves a model legislation at the Centre, followed by
separate legislations in states, which would give slum dwellers property
right (as different from land rights). Slumdwellers are mostly squatters on
government or private land, but this legislation will make them rightful
owner of homes on such land. As per the government data, slums occupy as
much as 4% of urban India, of which 78% belongs to the state and central
government.

Since a large chunk of the government land belongs to the Centre, the
government is planning to set up an inter-ministerial panel to thrash out
the modalities of making part of the land available for housing slum
dwellers. The panel would have representatives from the ministry of
railways, defence, commerce & industry, shipping and road transport.


These ministries and a number of PSUs have large tracts of their land
illegally occupied by slum dwellers, although exact estimates on such land
is not available. Such occupants cannot be evicted due to political
compulsions, said the official. The programme will not only help the
government reclaim a large portion, but also provide better housing
conditions for slumdwellers.

The proposed scheme recognises a group of 15 or more hutments as a slum,
against the 60 hutments norm in the last census. This brings larger number
of urban poor within the ambit of the scheme. Under Rajiv Awas Yojana, every
state will undertake a city-level slum profiling.

Under the scheme, a slum redevelopment project can be undertaken by a
private developer, as is the case in Mumbai, with financial assistance
extended to slum dwellers. The resident himself can undertake construction
of his house, if he so chooses. Each slum household would get a mix of the
Centre’s grant (maximum Rs 1.5 lakh), along with a 5% interest subsidy on
home loan up to Rs 2.5 lakh for construction. Tenants living in slums for
more than two years will also be eligible under the scheme.

In Mumbai, slum redevelopment by private developers has emerged as a
successful model with players such as HDIL and Ackruti City making major
business gains through this. “The dream of a slum-free India is very much
acheivable,” says HDIL MD Sarang Wadhanwan, whose company has made fortunes
in slum-redevelopment projects in Mumbai for the past 13 years.

He says a tax-incentive could encourage developers to take up such projects.
The slum redevelopment project offers around 60-70% margin, twice that of
any ordinary housing project. However, it is fraught with longer gestation
period, and requires to build consensus among slum dwellers and manage local
politicians and activists.

Of the total population of 102 crore, 28 crore are urban slum dwellers in
India. Eight crore are classified as urban poor and two-third of them live
in slums. Almost 54% of Mumbai lives in slums, while it is 46% in Faridabad,
44% in Aligarh and 43% in Meerut.

The government data shows that slums are no longer confined to major metros,
but have spread to smaller towns. And the migration to urban centres is only
going to gain momentum in the coming years. As per government estimates,
urban population is all set to quadruple in the next 30 years.

“Urban population will grow despite National Rural Employment Guarantee Act
(NREGA) scheme as all the real job opportunities lie in urban areas,” says
Ranjit Mitra, director of Delhi-based School of Planning and Architecture.
Therefore, he argues, land should be freed up and town planners need to have
more inclusive masterplans.

“There is an urgent need to increase housing supply and relax tenancy laws
that might encourage more houseowners to rent their homes,” says Mr Mitra.
Planners also underline the need for an efficient and less expensive
transport system to make housing for the poor viable.
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