The newly-appointed Housing and Urban Poverty Alleviation Minister Ajay Maken on Tuesday said private builders would have to reserve 35 per cent of their residential projects, or 15 per cent of floor area ratio (FAR), whichever was higher, for economically weaker sections (EWS) under the Rajiv Awas Yojana.
He also asked the private sector to pass on their benefits to EWS instead of only maximising profits. The minister said under the ambitious Rajiv Awas Yojana, the government had proposed expenditure of Rs 40,000 crore.
Maken made these comments while speaking to Business Standard at the sidelines of the 14th World Innovation Summit and Expo on Power, Constru India 2012 and the Asia Business Responsibility Conclave-2012 organised by India-Tech Foundation.
He said people belonging to the EWS would get loans from banks without collateral. For this purpose, the minister said that a credit-risk guarantee fund has been set up for low income housing and all states would have to implement these norms in all cities. According to Maken, India has witnessed rapid urbanisation and the need for housing is growing rapidly, too. “The urban population has risen to 31 per cent from 27 per cent in just the past 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.
According to the minister, the government is giving a priority for the development of green houses across the country. “We will approach the finance ministry for tax incentives, transfer of development rights and floor space index to encourage more green buildings,” he said. Maken added that environmentally friendly housing would 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 being circulated at the inter-ministerial level.
“We propose to table it during the winter session of 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 that during the 12th plan programme, a capacity addition of 88,537 Mw is targeted. Of this, coal-lignite based capacity will be 69,800 Mw, hydro 10,897 Mw, nuclear 5,300 Mw and gas-based capacity will be 2,540 Mw.
The renewable energy capacity addition is expected to be of the order of 18,500 MW.
Singh informed that the capacity addition of 54,964 MW in the 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 per cent and energy shortage of around 8.4 per cent.
“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,” said Singh.
Alok Perti, former coal secretary and currently advisor in the Ministry of Coal, said that coal producing during the first six months of the 12th Plan has grown by 8 per cent and the per day wagon fills of coal dispatched also rose by 11 per cent to 180 from 162 during the same period. He said the total coal requirement during 2012-13 is projected at 410 million tonne.
Credai resents diktat on housing for the EWS
Realty developers’ apex body Credai (Confederation of Real Estate Developers' Association of India) has expressed strong resentment to the Centre’s proposal for compulsory reservation of 35 per cent 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 (low income group) or EWS,” said a Credai memorandum to Union Minister for Housing and Poverty Alleviation, Ajay Maken.
Credai, with over 8,800 members across India, has sought time with Maken to discuss the various issues concerning the housing industry.
Credai National President Lalit Kumar Jain said that 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 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.
The 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 be 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.
The 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 per cent for below 80 sq. mt. The area required for the special housing zones could be 10 acres with a minimum FSI or floor area ratio 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. It suggested a 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 from their places of work, said Credai.
