Barely two months ahead of what is being tipped as an election Budget, Union Minister for Housing and Urban Poverty Alleviation Ajay Maken says he expects around Rs 70,000 crore for two key housing schemes during the 12th Plan (2012-17). In an interview with Dilasha Seth and Nivedita Mookerji, Maken discusses the plans and goals of his ministry in the coming years. Edited excerpts:
The ministries of urban development and housing seem to have overlapping features. How do you propose to make the ministry of housing more relevant?
I don’t think you can compare the two ministries. They are totally different. It is like saying power (ministry) and coal or mining and steel are one. It’s true that we both work in urban areas but both ministries have a clear demarcation as far as work is concerned. I received a delegation from South Africa and Brazil this week and they appreciated the fact that we have separate ministries for housing and urban poor. We are specifically targeting the urban poor.
Even so, what are your plans for the housing ministry?
We are discussing and evaluating projects to reinvent these. For instance, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) Phase-I had basic services to the urban poor and integrated housing and slum development programmes. Then we had the Shehri Rozgar Yojana to create skilled and meaningful employment. JNNURM started in 2005 and Shehri Rozgar Yojana in 1997. Concurrent evaluation have been done for all these schemes. We are in the process of reinventing these schemes to make them more meaningful. We want to start JNNURM Phase II and the Rajiv Awas Yojana-II in the next financial year. We are in the process of taking it to the Cabinet for final approval.
What is the financial implication of reinventing these schemes?
We expect to get Rs 45,000 crore for the Rajiv Awas Yojana and another Rs 21,650 crore for the Urban Livelihood Mission under the 12th Plan. Overall, we intend to spend about Rs 70,000 crore on these schemes.
How do you think you can meet the huge shortfall in housing?
In a recent study, Prof Amitabh Kundu estimated a 18.78 million housing shortage. We need to approach this issue in two ways — constructing new houses and making incremental housing for those who live in congestion. We are taking up the low-cost housing issue with the finance ministry. Affordable housing should be granted infrastructure status so that loans can be given at affordable rates. Now, affordable housing comes under commercial real estate (CRE).
But CRE housing should be separated from this sector for it to get benefits. Once it’s a part of the infrastructure sector, four per cent of bank loans should be reserved as priority loans for affordable housing.
But developers say they don’t have land for affordable housing. How do you resolve the issue?
Most builders get land. But the advertisements you see are for HIG (higher income group) and MIG (middle income group). The Census showed that in urban areas, 11 per cent houses are vacant, owned by people in HIG and MIG.
How is the government planning to provide housing to so many when scarcity of land and real estate is a major problem?
There is no paucity of land if you go on the outskirts. But we would ask state governments to be liberal with FAR/FSI (floor area ratio and floor space index) and population density norms. In Indian cities, we have the lowest population density and FAR norms. FSI in developed countries is in double digits. So, cities need to go up in terms of tall buildings.
Are we not too late in doing that, as FSI and FAR should have been thought of at the time of city planning many years ago?
We are talking about redevelopment of new townships, so we can do that. Towns went up from 5,169 in the 2001 Census to 7,980 in 2011. Cities are also spreading. We need to plan cities better. Land and colonisation are a state subject, so states need to come up and discuss it with developers, so they can free land with high FSI. Thirty-five per cent of dwelling units should be for the economically weaker sections. So, developers need to be given additional FSI to build low-cost houses. Tax concessions should also be given.
What’s the status of the real estate regulation Bill that has been in the making for years?
We are on it but we will not like to comment anything at this point. But when it comes, it will ensure greater transparency in the real estate sector. It will protect end- users and consumers.