Building plans

A good start in implementing slum rehabilitation across India.

The biggest challenge in most large,ambitious government schemes is getting the mechanisms for implementation right. The government of Indias flagship scheme to make India slum-free,the Rajiv Awas Yojana expected to cost the Centre Rs 60,000 crore to Rs 70,000 core in the Twelfth Plan period still needs to be vetted on that score. There are,of course,different ways to implement slum rehabilitation successfully. Which one will the government choose?

A new set of proposals by the Union housing and urban poverty alleviation ministry to guide the Rajiv Awas Yojana sheds some light on the governments thinking on mechanisms for implementation. As with other infrastructure projects,public-private partnership is the preferred mode. The burden of financing slum rehabilitation schemes will be split three ways among the Centre,the states and private developers. According to the proposals put forward,the Centre will bear the maximum burden of 50 per cent; the states will bear 10-15 per cent through their resources; and the balance

35-40 per cent will be borne by private sector developers. The proposed sharing of the financial burden will,of course,ensure accountability from each of the three parties involved.

The government proposes to give various incentives to private developers to attract interest. State governments will,for example,be required to provide higher Floor Space Index FSI to the developers. This will be a radical and welcome shift in policy whose impact could eventually be felt beyond just slum rehabilitation schemes peculiarly,FSI in most Indian cities,including cramped Mumbai,is well below global standards,and simply leads to housing shortages and inflated real estate prices. In addition to more FSI,the government will also give developers the right to commercially exploit a part of their land,say by selling some flats to the general public in an open sale. The government will also try to ensure the creation of an appropriate market mechanism at the buyers end. There will be no freebies the beneficiary will have to pay Rs 70,000-80,000 for a house,the exact price depending on the city. For those in need of funds,an interest subsidy will be provided of 5 per cent on loans up to Rs 1 lakh. Needless to say,it will be a real challenge for the Centre and states to ensure that all this gets implemented on the ground.