Clean cities are a relatively new concept in India and a thrust area of the Union government at the moment. The housing ministry is pursuing several schemes to address the issue of cleaning up the cities in an effort to make them slum-free. The most important among them is Rajiv Awas Yojana. Other programmes run by the housing ministry include interest subsidy scheme for housing the urban poor (ISHUP), basic services to the urban poor (BSUP) and affordable housing in partnership.
Rajiv Awas Yojna (RAY), launched at the fag end of last year, has sanctioned Rs 120 crore for the states to take preparatory steps for the project. The project got a 700% hike in the most recent Budget, pushing up the outlay to Rs 1,270 crore. The cost of the scheme will be shared by the Centre, states and urban local bodies, much in the pattern of another major ongoing programme to clean up the cities, namely Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
RAY is the most ambitious programme under the housing ministry to remove slums, provide decent dwelling units to slum-dwellers and, most importantly, give them property rights. All state governments are major stakeholders of this scheme. The scheme?s success hinges on the involvement of states, as land is a state subject and only the states can grant property rights to the slum-dwellers. Once the property rights are granted, it will have a minimum lock-in period before the house can be sold. However, the dweller can mortgage his house to obtain loans.
Two ongoing schemes of the ministry will be absorbed in RAY as this programme is comprehensive and all encompassing. The schemes are BSUP and integrated housing and slum development programme (IHSDP). These two components of the JNNURM would be discontinued in their present form. Not only JNNURM but two other schemes running under the housing ministry?Interest Subsidy for Housing the Urban Poor (ISHUP) and affordable housing in partnership?would be dovetailed into RAY.
Once RAY starts in the next two to three months, BSUP and IHSDP would stop in its present form. In other words, JNNURM stops and RAY starts.
To implement the scheme, the housing ministry is mulling setting up housing micro finance companies to lend to slum-dwellers, and is also in talks with several private and public sector banks to convince them to lend to this section of people.
The Centre is looking at involving private developers in a big way to complete this task. In order to ensure that public-private partnership (PPP) alliances are a success, the Centre is ready to give up to 40% viability gap funding along with capital subsidy and interest subsidy. The Centre would also bear the infrastructural costs. The developer would only have to build the dwelling units, and some of which can be sold at market price. Other incentives for the private developer include land use changes and an increase in floor space index. Some states like Gujarat, Rajasthan and Andhra Pradesh have made changes in regulations to encourage greater participation from private developers.
The ministry wants in situ development rather than relocation so that the slum-dwellers are not far off from their place of work. While the work of redevelopment is going on, the slum-dwellers will be provided with temporary shelters until they get their new dwelling unit.
The developed slum area will have infrastructure facilities like water supply, sewerage system, storm drainage, solid waste management, roads, parks, education and health infrastructure; livelihoods centres/ workplaces; informal sector markets and the like. External infrastructure connectivities will also be planned simultaneously with internal infrastructure.
The ministry would undertake a biometric survey of the slum-dwellers before making house allocations, subject to the guidelines issued by the Unique Identification Authority of India.
Earlier in the ISHUP scheme, the Centre gave 5% interest subsidy for loans up to Rs 1 lakh, now for RAY, it would go up to Rs 2 lakh. The Centre also does not want the equated monthly installments (EMI) of the dweller to exceed 25% to 35% of his income. In case the EMI works out to be more, states and urban local bodies (ULBs) are expected to pick up the balance.
The housing ministry has worked out the average price of EWS housing at Rs 2.5 lakh. After capital subsidy and interest subsidies, it turns out that the Centre is bearing more than half the cost of the dwelling unit.
In order to give states greater freedom to arrange for finances they have been allowed to raise funds from financial institutions in India and abroad and can also help out the ULBs with their share of payment.
With a view to bring in more people within the radius of RAY, the housing ministry is fine-tuning some of the parameters. As a first, the upper ceiling of the income range of economically weaker sections (EWS) and low-income group (LIG) is being altered. The upper limit of EWS will be almost doubled to Rs 6,500 from from Rs 3,300 at present. With LIG, the upper limit has been fixed to Rs 11,000 from Rs 7,500. Both these section are going to be beneficiaries of RAY.
kakoli.chatterjee@expressindia.com
