Election code delays Rs 5k-cr housing scheme

Election code delays Rs 5k-cr housing scheme
The Financial Express, November 13, 2009, Page 2

Kakoly Chatterjee

Nine months after the Centre launched Rs 5,000-crore affordable housing programme, only a fraction of funds have been spent, with officials attributing the slippage to the model code of conduct that was in place till recently.

Maharashtra is the only state which has spent a reasonable amount under the programme, which is being implemented under the public-private partnership (PPP) mode. Maharashtra has spent about Rs 200 crore under the scheme, followed by Himachal Pradesh (Rs 50 crore), Madhya Pradesh and Chattisgarh (Rs 25 crore each).

Under the programme, the government gives an incentive of Rs 50,000 for each dwelling unit, the developer constructs provided that 25% of the units are dedicated for economically weaker sections (EWS). The rest of the houses are constructed for lower income group (LIG) and middle income group (MIG), which the developer can sell at the market price. In most cases, the developer comes with his piece of land parcel.

According to officials in the housing ministry, a spurt in the demand for affordable housing is now evident and the programme could hence pick up in the coming months. The programme launched in February this year envisages allocation of Rs 5,000 crore for affordable housing in 65 mission cities. However, if larger cities are interested in the programme, they would also be encouraged, subject to the availability of funds. Funds are allocated to each state for this scheme. Some states like Maharashtra and Gujarat have been allocated Rs 360 crore each, Uttar Pradesh, Rs 470 crore, Andhra Pradesh, Rs 290 crore, and Tamil Nadu, Rs 240 crore.

Through the (PPP) model, Maharashtra is building 40,000 houses, Himachal Pradesh, 10,000 houses, Madhya Pradesh and Chhattisgarh, 5,000 each. A project for 10,000 houses in Lucknow , Uttar Pradesh is in the process of being appraised by the ministry.

Major projects in Maharashtra include— 13,000 houses being built by Maharashtra Housing and Area Development Authority (MHADA) where 30% to 40% of the houses are dedicated for economically weaker section (EWS), 20,000 houses are being built near Pune over 123 acre where 25% is dedicated for EWS.