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Thursday, July 19, 2018

Not much for Mumbai in PM’s ‘Housing for All’ project

Modi’s pet project not suited to address unique housing problems region faces.

Written by Sandeep A Ashar | Mumbai | Published: September 2, 2015 1:04:36 am

Prime Minister Narendra Modi’s pet project, ‘Housing for All’, does not seem to have much to offer for land-starved Mumbai Metropolitan Region (MMR) where acute housing shortage is one of the biggest challenges.

The Maharashtra government, which is shortlisting cities and towns to be included in the Centre’s mission, is of the view that the fiscal incentive offered was untenable in Mumbai. “Mumbai has about 13 lakh slum dwellings in existence prior to January 1, 2000 and eligible for rehabilitation. A grant of Rs 1 lakh per dwelling will require Rs 13,000 crore, which is financially unviable,” a senior government official said.

The Modi government has promised an average grant of Rs 1 lakh per slum household rehabilitated through such projects. Though the housing mission includes a component of grants for rehabilitation of slum dwellings under private partnership, senior state officials said that Mumbai might have to do with the ongoing slum redevelopment model where the state allows private players to leverage slum-locked lands for rehabilitation projects.

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Another hurdle in Mumbai’s inclusion among cities covered is a rider that the beneficiary family must not own a pucca house anywhere in the country. Senior officials said the state government has approached the Centre for withdrawing the rider. “The housing crunch in Mumbai is most severe among the migrant population. Most have pucca houses in their native places,” said a senior official.

The housing department has proposed that the existing slum redevelopment model through the Slum Rehabilitation Authority (SRA) be adopted for Mumbai. The SRA model allows developers to use slum-locked lands as resources and extend floor space incentives against rehabilitation of slum dwellers. Official statistics reveal that since the model was rolled out in 1996, less than 13 per cent slum projects have been completed.

The ‘grants for slum rehabilitation’ model may not work in Mumbai’s satellite town, Thane, too.

Of the 24 lakh eligible slum dwellings in Maharashtra, nearly 18 lakh are in Mumbai, Thane, Pune, Pimpri-Chinchwad, and Nagpur. “It has been decided that slum redevelopment under the state’s existing SRA model be continued in these cities,” a senior official said.

The state has decided to include 20 smaller towns (Class C and D) in the Centre’s model. The state has proposed to extend an additional grant of Rs 1 lakh per dwelling from its own kitty to 16 D class cities. In Chandrapur (Vidarbha) and Parbhani (Marathwada), where housing projects have not taken off, the state proposed to grant an additional Rs 3 lakh for slum rehabilitation projects.

Mumbai, where land prices have soared, will not derive much from the second component, which involves extension of credit linked interest subsidy for purchase of affordable homes. The Centre has proposed an interest subsidy of 6.5 per cent for home loans availed by economically weaker home-buyers; but has introduced a cap that this benefit would be available for loans up to Rs 6 lakh.

The Centre has promised assistance of Rs 1.5 lakh per home constructed for economically weaker sections through public private partnership projects. Just as Maharashtra has decided to provide an additional assistance of Rs 1 lakh from its own resources for this component, senior officials said that developers in MMR, where construction prices are among the country’s highest, are unlikely to be enthused by the option.

The government is not in favour of the fourth option, Rs 1.5 lakh subsidy for construction of individual housing, since it is wary of graft complaints. The Centre has set 2022 as deadline for achieving housing for all. A proposal for inclusion of cities from Maharashtra will soon be placed before the cabinet.

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