Inaugurating a Rs 2,400-crore housing project for slum dwellers on the outskirts of the city, Singh said he expects Chandigarh to become the first slum-free city in the country.
"I believe such important projects will give a new dimension to the country in its journey for becoming a developed nation," he said.
Rapid increase in urban population would put immense pressure on urban infrastructure in next couple of years, the Prime Minister said, adding the the urban population in the country was going to increase by 22 crore in next 20 years.
"The pace of urbanisation in India is going very fast. In 1971, the urban population was 11 crore. In last 40 years till the year 2011, the strength in urban population went up by 27 crore. It is estimated that its strength will go up by 22 crore in next 20 years," Singh said.
Increase in urban population will put immense pressure on country's urban infrastructure. "Our growing slums in cities present a picture of the kind of problems arise because of urbanisation," he noted.
He said that the strength of people living in slums was estimated to grow from 10 crore to 10.4 crore by 2017.
The Prime Minister said a sum of Rs 41,000 crore is expected to be invested for setting up 15.6 lakh houses under Jawaharlal Nehru National Urban Renewal Mission scheme (JNNURM) scheme.
"Till now since the inception of JNNURM, 15.6 lakh houses have been approved to be developed and for which Rs 41,000 crore of investment is expected to be invested," he said.
The Centre has floated Rajiv Awaas Yojna scheme for making the country slum free, Singh said. Under this scheme, the Centre will try to construct up 10 lakh houses for urban poor people in next four years.
The government is providing a loan of Rs 5 lakh to urban poor people with interest subsidy of 5 per cent on bank loan.
"A Credit Risk Guarantee Fund of Rs 1000 crore has also been set up for this purpose whereby urban poor people will get collateral free bank loan for the houses," he said.
He said that a scheme to involve the private sector in creating housing facilities for the urban poor has been started.
"Under the scheme private sector companies will be given financial support for the construction of houses for the weaker sections and those in the LIG categories," the Prime Minister said.
After Independence, he said, Chandigarh was the first planned city in the country.
"Internationally, the city is known for its architecture and urban design. Amongst all the states and Union Territories the per capita income in this city is the highest. In 2010, it was declared cleanest city and now I expect it should become
the first slum-free city in the country," the PM said.
Inaugurating the housing complex in Dhanas village which would benefit nearly 8,500 families living in slums here, Singh handed over the keys to the first batch of 10 people.
A total of 8,448 flats each of 267 square feet have been built under the Jawaharlal Nehru National Urban Renewal Mission scheme.
Singh congratulated the Housing and Urban Poverty Alleviation Ministry and Chandigarh Administration for the project.
As per an official survey, there are around 25,000 families that have been identified as living in slums in various places in the city, a spokesman said adding, "The idea of the project is to make Chandigarh slum-free."
These flats will be handed over to the beneficiaries on lease for a period of 20 years, after the completion of the time period, the house will be allotted to them, he said.
The complex would have sewage treatment plant (STP), electricity, drinking water supply, school, police station, dispensary among other things.
The flats have a living room, a bathroom and kitchen and are expected to be inhabited by about 50,000 people.
UT Administrator Shivraj Patil has directed officials to plan and set up solar photovoltaic panels on the roofs of all the flats.
Union Minister of Housing and Urban Poverty Alleviation Girija Vyas, Governors of Punjab and Haryana Shivraj Patil and Jagan Nath Pahadia, Chief Ministers of the two states Parkash Singh Badal and Bhupinder Singh Hooda and local Congress MP
Pawan Bansal were among those present.
Tight security arrangements have been made for the Prime Minister's visit.