The Madhya Pradesh government has claimed that sixteen cities of the state have joined Rajiv Awas Yojana, also known as RAY.
Yet the state authorities have to work harder to implement it to make the state slum-free by upgrading or creating new housing infrastructure in slum areas. The RAY authorised the government to extend financial assistance and assign property rights to slum-dwellers for shelter and basic civic and social services.
“Initially RAY was launched in six cities of Bhopal, Gwalior, Indore, Jabalpur, Sagar and Ujjain but ten more cities have joined the scheme to create slum-free residential areas. Yet bankers turning the willing participants away for loans,” a highly placed government source told Business Standard, “they (bankers) do not want to run the risk against any housing loan under the project. They want a cover.”
Any slum-dweller with lease or patta from the state government before 31 December 2007 or latest by 31 December 2011 is entitled to hold a title against the government land on which he lives, even if it is an encroachment on the government land. No encroacher on private land will be entitled for title of the land under the RAY.
Besides central and state government’s contribution, the slum dwellers are also required to chip in at least 20 per cent as their contribution. The bankers are not ready to fund less than 13 per cent. Earlier last year the Central government had decided to establish Rs 1,000 crore mortgage risk guarantee fund to facilitate lending for the urban poor housing. “State has yet to learn about it. They have sanctioned Rs 225 crore so far,” the source said.
It needs years and approximately Rs 5000 crore or “more” to implement the RAY across the state.
Not only bankers but state authorities also face problem since the RAY does not permit state authorities to hand over title deed before entire residential complex is completed.
"There is a grave difficulty in this matter; the bankers by rule cannot fund a resident before he holds the title or the house allotted. More importantly most slum dwellers do not have regular income,” the source added.
The scheme is expected to cover about 250 cities, mostly with population of more than 100,000 across the country by the end of 12th Plan (2017) while Madhya Pradesh has nearly 20 lakh population in all sixteen cities.
He said the Bhopal plan would be ready by next month, while the Ujjain city plan is underway. There are nearly 1,200 slums in four towns like Indore, Bhopal, Gwalior, Jabalpur and Sagar. “To know exact number of slums in other cities a mega survey is being conducted,” said the source.