Newly appointed union minister of housing and urban poverty alleviation Ajay Maken on Tuesday said the private builders will have to reserve 35% of houses for economically weaker sections (EWS) or 15% Floor Area Ratio (FAR) whichever is higher under the Rajiv Awas Yojana. He also asked the private sector to pass on their benefits to EWS instead of only maximizing the profits. The minister said under the ambitious Rajiv Awas Yojana the government has proposed an expenditure of Rs 40,000 crore.
Maken was delivering a key note address at the 14th World Innovation Summit and Expo on Power, Constru India 2012 and ABRC (Asia Business Responsibility Conclave) 2012 organized by India- Tech Foundation.
Maken also informed that the loans will be available for EWS from the banks without a collateral. The minister announced that a credit risk guarantee fund has been set up for low income housing and all the states would have to implement these norms in all the urban cities.
The minister said there has been a rapid urbanization in the country and the need for housing is growing rapidly. “The urban population has risen to 31% from 27% in just last six to seven years while the total number of towns also surged to 7,800 from 5,100 during the same period. However, during the advertisements rolled out by the builders and developers there are hardly any mention of reservation of residential flats for EWS,” he noted. Maken reiterated that the developers will have to pass on benefits to the service providers instead of maximizing their profits.
According to the minister, the government is giving a priority for the development of green houses across the country. “We will move to the finance ministry for providing tax incentives, transfer of development rights (TDR) and floor space index to encourage more green buildings,” he informed. Maken said green houses will also address the issue of climate change and green house effects.
On the establishment of regulatory authority for the housing sector, Maken said the bill is currently circulated at the inter ministerial level. “We propose to table it during the ensuing winter session of the parliament. At this moment I cannot divulge further details as the bill will be taken before the cabinet for its approval,” he added.
Meanwhile, Manjit Singh, member (thermal) Central Electricity Authority said during the 12th plan programme estimated capacity addition of 88,537 MW is targeted. Of this, coal-lignite based capacity is of the order of 69,800 MW, hydro-10,897 MW, nuclear-5,300 MW and gas based capacity-2,540 MW. The renewable energy capacity addition is expected to be of the order of 18,500 MW. He informed that the capacity addition of 54,964 MW in 11th plan was record in itself as it has been the highest capacity addition during any previous plan periods.
Despite this the country is facing a peak shortage of around 9% and energy shortage of around 8.4%.
“We are aware of the growing concerns of the climate change and the need for substantial development of the country. India needs to develop its power sector to meet the existing shortage as well as to meet the growing demand and also frame a suitable strategy for low carbon growth,” Singh said.
Alok Perti, former coal secretary and currently advisor, Ministry of Coal said the coal producing during the first six months of the 12th plan has grown by 8% and the per day wagon filled up of coal dispatched also rose by 11% to 180 from 162 during the same period. He said the total coal requirement during 2012-13 is projected at 410 million ton.
CREDAI resents Centre’s impractical diktat on LIG Housing
Realty Developers apex body CREDAI (Confederation of Real Estate Developers' Association of India) has expressed strong resentment to the Union Government’s proposal for compulsory reservation of 35% of dwelling units built for the economically weaker sections (EWS).
“Such a directive, without any incentives to the developer community, would only burden the open market buyers, mainly the middle income group, which will be forced to cross-subsidise the LIG or EWS” said a CREDAI memorandum to Union Minister for Housing and Poverty Alleviation, Ajay Maken.
CREDAI, with over 8,800 members across India and it is the largest representative body of the developer community, ha sought time with Mr. Maken to discuss the various issues concerning the housing industry.
CREDAI National President Lalit Kumar Jain said the government should model the housing policy to suit the poor in such a way to encourage developers to rush for it rather than taking compulsory steps which ultimately might be counterproductive as they could lead to a fall in the housing stock.
The demand-supply mismatch is one of the reasons for the market price movement and any further fall in the housing stock will only contribute to rise in prices, CREDAI argued.
Central guidelines must have a systematic and rational approach on incentives, cross-subsidization and be aimed at solving problems in a practical manner. For instance, reservation for EWS / LIG is not possible in every project across the board as maintenance will be a major issue.
High rise buildings with lifts and other amenities push up not just the cost of the project, but also the subsequent maintenance. Most LIG or EWS families might not be able to bear the high maintenance cost which would mean that the MIG and others might have to bear the brunt. The EWS and LIG categories will have to be given walk-up apartments which will not be more than four-storey high and this in urn could pressure in FSI.
HUPA (Ministry of Housing and Urban Poverty Alleviation) should take up the issue of reduction of cost of funding with the Finance Ministry so that developers would b e incentivised to construct houses for the poor segment. The centre should also ask the state governments to exempt EWS & LIG from registration fee and stamp duty.
Right kind of policies will encourage developers to create the required EWS & LIG housing stock, lessen the burden on precious government resources and ultimately lead to improvement in quality of life for the lower strata with proper water supply and sanitation.
CREDAI called for creating special housing zones with tax exemptions on the lines of SEZ. These zones should have tenements to the extent of 75% for below 80 sq mtr. The area required for the special housing zones could be ten acres with a minimum FSI/FAR of 4 to allow large scale construction to meet the rising demand.
The housing for all policy would also require solid back up with all round reforms, quick clearances and minimal interference from other government departments like environment, CREDAI said and suggested mass rapid transit system for improving public transport. Otherwise people would be forced to spend most of their quality time only in commuting to and fro their places of work.
