Unit 3Housing Programmes in India

UNIT: 3 HOUSING PROGRAMMES IN INDIA

AR 1603 - URBAN AND RURAL HOUSING

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Site and services scheme:Under a wide variety of types and variations, "Sites-and-Services" schemes are the provision of plots of land, either on ownership or land lease tenure, along with a bare minimum of essential infrastructure needed for habitation.



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Site and services scheme:INTRODUCTION Rapid growth of urban areas in most developing countries in the last few decades has led to shortfall in many sectors, primarily housing. The problem has been two-fold:

1. on one hand, the majority of the people moving to the urban areas have lacked the necessary asset and financial holdings in order to acquire a "decent" house.

2. On the other hand, the designated government agencies and bodies have not provided sufficient housing units which are affordable for the poor majority in urban areas.

The proliferation of slums and squatter settlements has been a result of this scenario.



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Site and services scheme:INTRODUCTION The realization that providing a "complete" serviced house by government agencies is not possible or simply cannot be afforded by most low-income families prompted a shift in focus from supplying a fully serviced house to that of providing only serviced land. The key characteristic of the approach the use of the beneficiaries' "sweat equity" and other internal resources (community, financial and so on) in the actual construction and development of the houses. Sites-and-services schemes became the byword for solving the problem of squatter settlements. Squatter settlements were and has always been considered illegal and in order to relocate and rehabilitate the squatters (as a function of "slum clearance"), plots of land (or sites) with infrastructure on it (or services) were provided, and the beneficiaries had to, in most of the projects, build their own houses on such land. There are a wide variety of sites-and-services schemes, ranging from the subdivided plot only to a serviced plot of land with a "core" house built on it.



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Site and services scheme:HISTORICAL DEVELOPMENT OF THE CONCEPT The genesis behind Sites-and-services schemes is not new:

low-income people have always been housing themselves, albeit "illegally", in most urban areas of the developing world.

The key departure from earlier housing schemes, like low-cost housing or subsidized high-rise housing units, is that it recognized the ability of the low-income households to build their own house, provided an opportunity was given. Particularly in face of the failure of the conventional housing approaches, coupled with a number of studies that pointed out the ingenuity and perseverance of squatters to house themselves, providing sites and services only was touted as a answer to the problems of housing the poor in developing cities.

Sites-and-services schemes have also faced considerable opposition and failure in a number of projects, primarily due to a series of assumptions and misconceptions on the way in which low-income families house themselves.



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Site and services scheme:SITES-AND-SERVICES: THE BASIC PRINCIPLES The key components of a housing scheme are

1. the plot of land, 2. infrastructure (like roads, water supply, drainage,

electricity or a sanitary network), 3. and the house itself.

Various inputs that go into them include finance, building materials/technology, and labour.



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Site and services scheme:SITES-AND-SERVICES: THE BASIC PRINCIPLES

Thus, the sites-and-services approach advocated the role of government agencies only in the preparation of land parcels or plots with certain basic infrastructure, which was to be sold or leased to the intended beneficiaries.

The next step of actual house building was left to the beneficiaries themselves to use their own resources, such as informal finance or family labour and various other types of community participation modes to build their house.

The beneficiaries could also build the house at their own phase, depending on the availability of financial and other resources. This adopted the basic principle of the development of a squatter settlement but without the "squatting" aspect.



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TYPOLOGIES IN SITES-AND-SERVICES SCHEMES Depending on the investment made, resources available, the implementing agency or degree of organization of the beneficiaries, sites-and-services schemes were activated in a number of differing ways.

This variation was a result of the attempt to strike a balance between minimum "acceptable" housing conditions and affordability of the beneficiaries.

While following the basic rule of a plot of land (sites) and essential infrastructure (services), the degree of participation and inputs of the implementing agency on one hand, and the beneficiaries on the other, varied greatly.

They ranged from an empty plot of land and some services (like water, electricity and sanitation connections) to the provision of a "core" house (consisting of a toilet and kitchen only) on the plot of land with attached services.




TYPOLOGIES IN SITES-AND-SERVICES SCHEMES Some of the variations attempted in sites-and-services projects include: Utility wall: A "utility" wall is built on the plot which contains the connections for water, drainage, sewerage and electricity. The beneficiaries had to build the house around this wall, and utilize the connections from it. Some projects provided this utility wall in the form of a sanitary core consisting of a bathroom/toilet, and/or a kitchen.

Latrine: Due to its critical waste disposal problem, many project provide a basic latrine (bathroom and/or toilet) in each plot.




TYPOLOGIES IN SITES-AND-SERVICES SCHEMES Some of the variations attempted in sites-and-services projects include: Roof frame/ shell house, core house: The roof is the costliest component of a house and requires skilled labour to build. Therefore, some projects provide the roof structure on posts, and the beneficiaries have to build the walls according to their requirements. Conversely, a plinth is sometimes built by the implementing agency, which forms a base over which the beneficiaries can build their house. Other variations to this are the shell house (which is an incomplete house consisting of a roof and two side walls, but without front or rear walls) and a core house (consisting of one complete room).



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Site and services scheme:ACTORS AND ACTIONS IN SITES-AND-SERVICES SCHEMES The two key actors in a sites-and-services project are the intended beneficiaries and the implementing agency. In most cases, the intended beneficiaries of the project belong to the lower income group of an urban area - for example, squatters who have been relocated from their original illegal settlement. They are characterized by low incomes, informal sector jobs or irregular employment and lack the necessary assets to enable them to afford a "formal" sector house. With basic skills in construction, many are in a position to build their own house (there are however exceptions to these features - which have resulted in the failure of many sites-and-services schemes).



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Site and services scheme:ACTORS AND ACTIONS IN SITES-AND-SERVICES SCHEMES The other principle actor in the sites-and-services schemes is the implementing agency. In most cases, this is a government department or similar body, like the Housing Boards. Operating from goals and objectives on a city-wide scale and for all income groups, such agencies initiate sites-and-services schemes both for the provision of housing of low-income families as well as removing "eyesores" that squatter settlements depict. The basic division of the stages of implementation between these two principle actors determines the type of scheme being proposed. Several other actors play essentially supportive roles, including various government agencies responsible for provision of infrastructure, non-governmental or voluntary organizations and so on.



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Site and services scheme:SHORTCOMINGS OF THE SITES-AND SERVICES APPROACH Some of the constraints have been: Location: With high land costs in urban areas, most sites-and-services schemes are location on the fringe where such costs are not very high. This however causes two problems:

1. one, the large distance between the site and existing delivery networks, off-site and on-site provision of infrastructure is high and construction can be delayed.

2. Two, the extra distances that the beneficiaries have to travel (and the consequent extra costs) to the employment centres would discourage many beneficiaries to take advantage of such schemes.



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Site and services scheme:SHORTCOMINGS OF THE SITES-AND SERVICES APPROACH Some of the constraints have been: Bureaucratic Procedures: Selection procedures, designed to ascertain that applicants meet eligibility criteria, tend to be cumbersome, time-consuming and full of bureaucratic pitfalls, and provide opportunities for corruption. Besides, for many low-income families, the eligibility criteria are impossible to meet due to informal sector jobs or low/irregular incomes.

Delay in provision of Services: Due to a lack of coordination between the various implementation agencies and a "spread" of responsibility of providing the infrastructure and services, there is considerable delay in the final provision the services, even after the land has been allocated to the beneficiaries.



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Site and services scheme:SHORTCOMINGS OF THE SITES-AND SERVICES APPROACH Some of the constraints have been: Standards: High standards of construction and building quality is set by the implementing agencies making such schemes unaffordable to the target beneficiaries. Some sites-and-services schemes, for example, prohibit income generating activities on residential plots, including rental of rooms: they, thereby, limit the opportunities of residents to earn an (additional) income to pay for their plot and their house.



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Site and services scheme:SHORTCOMINGS OF THE SITES-AND SERVICES APPROACH Some of the constraints have been: Cost Recovery: Most sites-and-services schemes are plagued by poor cost recovery. One reason is the high costs that beneficiaries have to bear shortly after moving into the scheme. They have to pay for the plot as well as construction of the house, while they might be facing loss of income due to the move to the new scheme. Transport, water and electricity costs add to the burden which they might not have had before. But some of the main reasons for poor recovery has been delay in provision of services, inadequate collection methods, lack of sanctions for non-payment and absence of political will to enforce payment.



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Site and services scheme:FUTURE PROSPECTS FOR SITES-AND-SERVICES SCHEMES The positive aspect of sites-and-services schemes that deserves support is its recognition of the ability of people to house themselves, with a little backing from the government agencies. Thus the role of the government changes from that of a "provider" to an "enabler". It also enables them to save scarce resources by "sharing" the responsibility of housing with the intended beneficiaries. On the part of the beneficiaries, it makes best use of existing/potential resources, both at the household level as well as the community level. On a large scale, it enables the low-income families to obtain decent housing and services, at levels that can be afforded by them. While sites-and-services schemes are not a blanket solution for all ills of low-income housing, it does provide potential for future housing, making best use of existing resources, both governmental and household.



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Site and services scheme:The approach first appeared on a large scale in Madras (now Chennai) in 1972 when the World Bank engaged Christopher Charles Benninger to advise the Madras Metropolitan Development Authority (MMDA) on their housing sector investments. The approach links the user group's ability to pay with land prices and the costs of rudimentary and up-gradable infrastructure. The fundamental idea is to market plots with essential infrastructure at market prices, to avoid the resale of subsidized housing, directed at low income groups. The first major scheme planned by Benninger, at Arambakkum in Chennai, created about 7,000 shelter units, within the paying capacity of the urban poor. Within five years the MMDA created more than 20,000 units and the approach became a major strategy of the World Bank to tackle a variety of shelter problems globally.



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Rural Housing Schemes:India is a land of villages. To solve the problem of rural housing, our government has initiated the following steps:



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Rural Housing Schemes (IAY):The genesis of the Indira Awaas Yojana (IAY) can be traced to the programmes of rural employment, which began in the early 1980s.Construction of houses was one of the major activities under the National Rural Employment Programme (NREP), which began in 1980, and the Rural Landless Employment Guarantee Programme (RLEGP), which began in 1983. There was, however, no uniform policy for rural housing in the States.For instance, some States permitted only part of the construction cost to be borne from NREP/ RLEGP funds and the balance was to be met by beneficiaries from their savings or loans obtained by them. On the other hand, others permitted the entire expenditure to be borne from NREP/RLEGP funds. Further, while some states allowed construction of only new dwellings, others permitted renovation of existing houses of beneficiaries. As per announcement made by the Government of India in June 1985, a part of the RLEGP fund was earmarked for the construction of houses for SCs/STs and freed bonded labourers.



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Rural Housing Schemes (IAY):As a result, Indira Awaas Yojana (lAY) was launched during 1985-86 as a sub-scheme of RLEGP. IAY, thereafter, continued as a sub-scheme of Jawahar Rozgar Yojana (JRY) since its launching in April, 1989. 6% of the total JRY funds were allocated for implementation of lAY. From the year 1993-94, the scope of lAY was extended to cover below the poverty line Non-Scheduled Castes/ Scheduled Tribes families in the rural areas. Simultaneously, the allocation of funds for implementing the scheme was raised from 6% to 10% of the total resources available under JRY at the national level, subject to the condition that the benefits to Non-Scheduled Castes/ Scheduled Tribes poor should not exceed 4% of the total JRY allocation. IAY was de-linked from JRY and made an independent scheme with effect from 1st January 1996.These houses were given to them free of cost.



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Rural Housing Schemes (IAY):The objective of the scheme is to primarily help the weaker sections in rural areas who belong to Below Poverty Line (BPL) category by granting financial assistance for construction of a pucca house.

The funding of the IAY is shared between the Centre and State, in the ratio of 75:25 and in the case of UTs, 100% funding is done by the Government of India.

Moreover, in the case of NE States, the funding is shared in the ratio of 90:10.

The unit assistance for an IAY house is Rs. 45,000/- per house for plain areas and Rs. 48,500/- for hilly areas w.e.f. 01/04/2010. Rs. 15,000/- is provided for upgradation of the house.

Further, the 60 Left Wing Extremism (LWE) affected districts will be eligible for a higher rate of unit assistance of Rs.48,500/- applicable for all sanctions issued w.e.f 01/04/2010 onwards.



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Rural Housing Schemes (IAY):In addition to the financial assistance under IAY, an IAY beneficiary can borrow up to Rs. 20, 000/- from any Nationalized Bank at 4% interest per annum to top up the IAY unit assistance under Differential Rate of Interest (DRI) Scheme.

For those rural BPL Householders who don’t have house sites, from the year 2009-10, provision has been made to provide house-sites as part of Indira Awaas Yojana.

This funding is to be shared between Centre and States in the ratio of 50:50.



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SALIENT FEATURES OF INDIRA AWAAS YOJANA (IAY)Since reduction of shelterlessness is the primary objective, 75% weightage is given to housing shortage and 25% to the poverty ratios prescribed by Planning Commission for state level allocation.

For district level allocation, 75% weightage is given again to housing shortage and 25% to SC/ST population of the concerned districts.

On the basis of allocations made and targets fixed, District Rural Development Agency (DRDAs) Zila Parishads (ZPs) decide Panchayat wise number of houses to be constructed under IAY and intimate the same to the concerned Gram Panchayat.

Thereafter, the beneficiaries are selected from the Permanent IAY Waitlists prepared with the approval of respective Gram Sabha. Such Waitlists are prepared out of the BPL List 2002.



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SALIENT FEATURES OF INDIRA AWAAS YOJANA (IAY)The available resources under the Scheme in a district are earmarked for various categories as under:

(i) At least 60% of the total IAY funds and physical targets should be utilized for construction/upgradation of dwelling units for SC/ST BPL households.(ii) A maximum 40% for non-SC/ST BPL rural households.(iii) IAY funds and physical targets will be earmarked for BPL minorities in each State as indicated by the Ministry.(iv) 3% of the above categories are for physically and mentally challenged persons.

If any particular category is exhausted or not available in a district, allocation can be utilized for other categories as per priorities given in the Guidelines.

From 2006-07 onwards, funds and physical targets under IAY are also being earmarked for BPL minorities in each State.



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SALIENT FEATURES OF INDIRA AWAAS YOJANA (IAY)Further, the dwelling units are invariably allotted in the name of a female member of the beneficiary household. Alternatively, the same can be allotted in the name of both husband and wife. Only in case there is no eligible female member in the family the house is allotted in the name of an eligible male member.The construction of the houses is the sole responsibility of the beneficiary. Engagement of contractors is strictly prohibited. Sanitary latrine and smokeless chullah are required to be constructed alongwith each IAY house.A Task Force was constituted for examining various issues relating to construction of IAY houses including the study to compare the quality of IAY houses in various States. The Task Force has recommended, inter alia, that each State Government should finalise its type designs along with technical and material specifications. It is not necessary to have only one type design and one state can adopt more than one type designs depending upon local conditions.



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SALIENT FEATURES OF INDIRA AWAAS YOJANA (IAY)Necessary instructions have been issued to all the DRDAs regarding Convergence of various Centrally Sponsored Schemes (CSS) with IAY. IAY beneficiaries need to get benefits available under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), Total Sanitation Campaign (TSC), Janshree and Aam Aadmi Bima Yojana and Differential Rate of Interest (DRI) Scheme etc.

The Indira Awaas Yojana is continuously reviewed through Monthly and Annual Reports received from the States/UTs. Senior officers at the level of Deputy Secretaries and above in the Ministry are appointed as Area Officers for different States/UTs. These Area Officers visit the allotted States/UTs from time to time and inspect the actual implementation of the programme in the field. They also participate in the State Level Coordination Committee Meetings providing thereby, a source of effective link between the policy makers, i.e., Government of India and the implementing agencies (States/UT Governments). The programme is also reviewed at the meetings with the State Secretaries of Rural Development and with the Project Directors of DRDAs in the workshops held every year.



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Provision of Homestead SitesA scheme has been launched on 24th August, 2009 as part of IAY, for providing homestead sites to those rural BPL households whose names are included in the Permanent IAY Waitlists but who have neither agricultural land nor a house site. Rs. 10,000/- per homestead site is being provided under the Scheme the funding of which is shared by the Centre and the States in the ratio of 50:50.The States are also incentivized by allocating additional physical targets equal to the number of homestead sites provided by regularization of existing occupied land, allotment of Government land or purchase/acquisition of lands as the case may be.



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GOVT. Of TAMIL NADU – Rural housing policy:Tamil Nadu is implementing a scheme for rural housing “ Kailagnar Housing Scheme (KVVT) as an add-on to IAY, and much larger in scope and scale. Their vision is to become the first hut-free State in the country by 2016. This Scheme is the largest State-funded Scheme, with an annual outlay of Rs.2,250 crores (3,00,000 houses). Under the scheme, all huts in rural areas will be replaced by permanent houses with concrete roof in the next six years.

A 3-member Enumeration Team, comprising of Village Administrative Officer;Makkal Nala Paniyalar; and Village Panchayat Assistant has been formed.The enumeration has revealed that 41.5 per cent of the hutment dwellers are MBCs, followed by SCs (31.2%), BCs (23.8%), STs (2.8%) and OCs (0.7%). The houses are modelled on the lines of those built under the Indira Awass Yojana (IAY).



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GOVT. Of TAMIL NADU – Rural housing policy:While 60 per cent of the houses built under the IAY have been allotted to Scheduled Castes, 15 per cent to minorities and the rest to others, under the KVVT, the allocation will be strictly proportional to the total number of eligible huts belonging to members of each community.The beneficiaries in each habitation will be chosen in the ascending order of new door numbers found in the May 2009 electoral roll. The Rural Development Department is in the process of taking photographs of the beneficiaries (with a slate showing door number, street, habitation and village panchayat) in front of their huts to ensure clarity and transparency, he says.The permanent houses will be constructed in situ and no land acquisition is envisaged. Only people with pattas for their houses are eligible. Like IAY houses, the KVVT houses will be built with RCC roofing and will have separate toilet. The area of the house will be 200 sq. ft and the unit cost, Rs.60,000.

JNNURM (Jawaharlal Nehru National Urban Renewal Mission):It is a massive city modernization scheme. To improve the quality of life and infrastructure in the cities.The duration of the Mission is 7 years (2005-2012).

Background of the Program:(1) Need for Urban Sector Development: According to the 2001 census, India has a population of 1027

million with approximately 28% or 285 million people living in urban areas.

Urban population may increase to about 40% of total population by the year 2021. By the year 2011, urban areas would contribute about 65 per cent of gross domestic product (GDP). However, this depends on the availability and quality of infrastructure services.



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(2) Investment Requirements in the Urban Sector: In seven-year period.



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The cities should have elected bodies in position.



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Mission Statement: The aim is to encourage reforms and fast track planned development of identified cities. Focus is to be on efficiency in urban infrastructure and service delivery mechanisms, community participation, and accountability of ULBs towards citizens.



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Scope of the MissionThe Mission shall comprise two Sub- Missions, namely:(1) Sub-Mission for Urban Infrastructure and Governance: Administered by the Ministry of Urban Development. The main thrust of the Sub-Mission - on infrastructure projects relating to water supply and sanitation, sewerage, solid waste management, road network, urban transport and redevelopment of old city areas (2) Sub-Mission for Basic Services to the Urban Poor: Administered by the Ministry of Urban Employment and Poverty Alleviation. The main thrust of the Sub-Mission - on integrated development of slums through projects for providing shelter, basic services and other related civic amenities with a view to providing utilities to the urban poor.

Other cities and towns:Other than that selected 63 towns/cities, Smaller cities/towns are covered under Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT) and Integrated Housing and Slum Development Programme (IHSDP).



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JNNURM:BASIC SERVICES TO THE URBAN POOR (BSUP)Salient features• Central Assistance in the form of ACA(Additional Central Assistance) as full grant.• A minimum of 12% beneficiary contribution for houses which in the case of SC /ST/BC/OBC/PH and other weaker sections is 10%.• Access of Central assistance predicated upon the State/ Urban Local Bodies/Parastatals agreeing to reforms.• Reforms to ensure improvement in urban governance and management.• Cities to prepare City Development Plans and Detailed Project Reports.



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JNNURM:BSUP: FundingThe Central fund is released as Additional Central Assistance (in the form of grant). The financing pattern of BSUP is as under:

Sectors and Projects Eligible for Assistance - Directorate for Basic Services to the Urban Poor.Integrated development of slums, housing and development of infrastructure projects in slums in the identified cities.Projects involving development, improvement, and maintenance of basic services to the urban poor.Slum improvement and rehabilitation of projects.Projects on water supply, sewerage, drainage, community toilets, and baths etc.Projects for providing houses at affordable cost for slum dwellers, urban poor, economically weaker sections (EWS) and lower income group (LIG) categories.Construction and improvement of drains and storm water drains.Environmental improvement of slums and solid waste management.Street lighting.Civic amenities like community halls, child care centers etc.Operation and Maintenance of assets created under this component.Convergence of health, education and social security schemes for the urban poor



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Note: Land cost will not be financed (except North Eastern States and hilly States, namely Himachal Pradesh, Uttaranchal and Jammu and Kashmir).



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Housing & Slum Development ProgrammeAims at improving the conditions of the urban slum dwellers who do not possess adequate shelter and reside in dilapidated conditions.The scheme is applicable to all cities and towns as per 2001 Census except cities/ towns covered under JNNURM.The scheme seeks to enhance public and private investments in housing and infrastructural development in urban areas.

ObjectivesThe basic objective of the Scheme is to strive for holistic slum development with a healthy and enabling urban environment by providing adequate shelter and basic infrastructure facilities to the slum dwellers of the identified urban areas.



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CoverageSlum dwellers from all sections of the community through a cluster approach.Allocation of funds among States - on the basis of the States’ urban slum population to total urban slum population in the country.States may allocate funds to towns/cities basing on similar formula. However, funds would be provided to only those towns and cities where elections to local bodies have been held and elected bodies are in position.The State Governments may prioritize towns and cities on the basis of their felt-need.



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JNNURM:INTEGRATED HOUSING & SLUM DEVELOPMENT PROGRAMME (IHSDP)Salient Features• Central Assistance in the form of ACA (Additional Central Assistance) as full grant.• 80% percent of the project cost borne by the Central Government in general.• 90% of the project cost borne by the Central Government for projects from cities/towns in special category States.• A minimum of 12% beneficiary contribution for houses which in the case of SC/ST/BC/ OBC/PH and other weaker sections is 10%.• Access of Central assistance predicated upon the State/Urban Local Bodies/Parastatals agreeing to reforms.• Reforms to ensure improvement in urban governance and management.• Cities/towns to prepare Detailed Project Reports.



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JNNURM:INTEGRATED HOUSING & SLUM DEVELOPMENT PROGRAMME (IHSDP)IHSDP: FundingThe sharing of funds is in the ratio of 80:20 between Central Government and State Government/ULB/ Parastatals. For special category States, the funding pattern between Centre and States is in the ratio of 90:10. As in the case of BSUP, signing of a tripartite MoA is a necessary condition to access Central assistance.

BENEFICIARIES UNDER BSUP AND IHSDPThe targeted beneficiaries under BSUP and IHSDP are slum dwellers/urban poor. While a minimum 12% beneficiary contribution is

stipulated under Basic Services to the Urban Poor (BSUP) and Integrated Housing and Slum Development Programme (IHSDP), in the case of SC/ST/BC/OBC/PH and other weaker sections, it is 10%.

ComponentsThe components for assistance - include all slum improvement/ upgradation/relocation. Cost of land for such projects will not be provided under the programme and has to be borne by the State Government. Ceiling Cost for Dwelling Unit will be @ Rs.80,000 per unit. This ceiling cost will, however, be reviewed after one year.

For special category/hilly States and difficult/far flung areas, 12.5% additionality will be permissible over and above the prescribed ceiling cost.

Minimum Floor Area of Dwelling Unit - Not less than 25 sq. mtrs. Area and preferably two room accommodation plus kitchen and toilet should be constructed.Beneficiary Contribution - A minimum of 12% beneficiary contribution should be stipulated, which in the case of SC/ST/BC/OBC/PH and other weaker sections shall be 10%.



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Admissible ComponentsProvision of shelter including upgradation & construction of new houses.Provision of community toilets.Provision of physical amenities like water supply, storm water drains, community bath, widening and paving of existing lanes, sewers, community latrines, street lights, etc.Community Infrastructure like provision of community centers to be used for pre-school education, non-formal education, adult education, recreational activities, etc.Community Primary Health Care Centre Buildings can be provided.Social Amenities like pre-school education, non-formal education, adult education, maternity, child health and Primary health care including immunization, etc.Provision of Model Demonstration Projects.Sites and Services/houses at affordable costs for EWS & LIG categories.Slum improvement and rehabilitation projects.Land acquisition cost will not be financed except for acquisition of private land for schemes/projects in the North Eastern States & hilly States, viz., Himachal Pradesh, Uttaranchal and Jammu & Kashmir.



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Note: DPRs will have to be prepared by the implementing agencies for funding under IHSDP



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JNNURM:INTEGRATED HOUSING & SLUM DEVELOPMENT PROGRAMME (IHSDP)BSUP & IHSDP: HIGHLIGHTS OF PROGRESS BY 31.12.2010

• More than 15.40 lakhs houses sanctioned (1543747).• More than 3.7 lakhs houses completed.• More than 4.5 lakhs in progress.• More than 1.8 lakhs houses have been occupied.• 1443 projects costing more than Rs.36555.88 crores have been approved.• Central share of Rs. 20180.77 crores committed.• Additional Central Assistance (ACA) of Rs 9679.85 crores released.• Progress of 3 Pro-poor key reforms under JNNURM largely on track.• 30 Agencies empanelled by Mission Directorate for Third Party Inspection and Monitoring (TPIM) for BSUP and IHSDP.• An online JNNURM tracking system and Poverty Monitoring System developed.



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JNNURM:PROGRESS ON 3 PRO-POOR KEY REFORMSMinistry of Housing & Urban Poverty Alleviation is monitoring 3 Pro-poor key reforms. The details of reforms and the achievements are as under:

• Internal earmarking within local body budgets for Basic Services to the Urban Poor55 cities have undertaken implementation of this reform.

• Earmarking of at least 20-25% of developed land in all housing projects(both public and private agencies) for EWS/LIG category17 States (50 Cities) have issued the policy directives to reserve developed land in public and/or private housing projects.

• Implementation of 7- Point Charter: Provision of 7 Basic Entitlements/ServicesThis reform is to be implemented in a staggered manner over the Mission Period in convergence with the programmes of other Ministries as this is also an outcome of the Mission.



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JNNURM:SOME KEY INITIATIVES:Scheme of Affordable Housing in PartnershipThe Government has launched new scheme of Affordable Housing in Partnership with an outlay of Rs. 5,000 crores for construction of one million houses for EWS/LIG/MIG with at least 25% for EWS category. The scheme aims at partnership between various agencies/ Government/ parastatals/ UrbanLocal Bodies/ developers for realizing the goal of affordable housing for all. Detailed Guidelines have been issued in this regard. 14 projects with total project cost of Rs.792.04 Crore were approved for construction of 19,100 dwelling units under Affordable Housing in Partnership for the States of Uttar Pradesh (10 projects) and Chhattisgarh (4 projects).



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JNNURM:Central TPIMThe Ministry has appointed 2 agencies as Central TPIM agencies for undertaking TPIM exercises on a sample basis to independently report to the Central Government on quality in execution of BSUP and IHSDP projects in various States/UTs. A total of 126 projects have been selected on sample basis from States/UTs for independent assessment of quality of projects.

Enhancement of allocation by Planning CommissionPlanning Commission has enhanced the allocation by Rs. 5043 crore (BSUP - Rs. 2682 crore and IHSDP - Rs. 2361 crore).Revision of Ceiling Cost of Dwelling Unit under IHSDP Ceiling Cost of a dwelling unit provided under the IHSDP was revised with the approval of the Cabinet from Rs. 80,000/- to Rs. 1,00,000/- w.e.f. 01-04-2008.



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JNNURM:Advisory to all States for occupancy of Dwelling Units constructed under BSUPand IHSDPThe Ministry has also recently issued advisory to all States for drawing an action plan and set clear milestones for occupancy of the houses constructed under BSUP and IHSDP as early as possible.

Model Legal FrameworkThe Model legal framework for assigning property rights to slum dwellers is being prepared in consultation with States, Experts as well as the National law School, Bangalore.



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JNNURM: (EWS, LIG, MIG & HIG Scheme)Scheme of Affordable Housing in PartnershipThis Scheme is a part of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and takes into account the experience of implementing Basic Services to the Urban Poor (BSUP) and Integrated Housing & Slum Development Programme (IHSDP) for three years, and the assessment that shortfall in response from BSUP towns is a factor of the lack of urban land availability for expansion of cities, and after consultation with States/UTs who have agreed that the responsibility of making urban land available at affordable rates must rest with them in order to reduce the acute shortages of housing in urban areas. The scheme is also an acknowledgement of the strain of BSUP and IHSDP on state budgetary resources, and the need to draw in institutional finance for construction of affordable housing on a mass scale.



18TH HOUR

JNNURM:Affordable Housing scheme will apply mainly to the 63 BSUP cities, where shortages of land for housing are driving unplanned growth and raising home prices and rentals to unsustainable levels.

The projects which should be eligible under this scheme for assistance would need to meet the following two criteria:a) Dwelling units should be a mix of EWS/LIG/MIG categories

with the maximum size of a dwelling unit being at 1200 square feet super area, with at least 25% of them for EWS of about 300 square feet. In terms of carpet area, the minimum carpet area for EWS category shall be 25 square metres and maximum carpet area for MIG category shall be 80 square metres.

b) The sale price of dwelling units should have an upper ceiling in terms of Rupees per square metre of carpet area. The price ceiling would be settled in consultation with the States/UTs for different classes of cities.



18TH HOUR

JNNURM:DEFINITION OF AFFORDABLE HOUSESKeeping in mind that the housing shortages affect mostly the EWS and LIG, and the younger group of urban-urban migrants changing cities in search of better prospects, affordable houses, for the purpose of this scheme, may be taken as houses ranging from about 300 square feet (super built up area) for EWS, 500 square feet for LIG and 600 square feet to 1200 square feet for MIG, at costs that permit repayment of home loans in monthly installments not exceeding 30% to 40% of the monthly income of the buyer. In terms of carpet area, an EWS category house would be taken as having a minimum 25 square metres of carpet area and the carpet area of an LIG category house would be limited to a maximum of 48 square metres. The carpet area of an MIG house would be limited to a maximum of 80 square metres.



18TH HOUR

JNNURM:STRATEGY OF THE SCHEMEThe scheme for construction of affordable houses in partnership visualizesthat the cost of land and construction would be held down to affordable levels:Land costs would be intermediated by States/UTs and Development Authorities/Urban Local Bodies, by providing land at nominal, predetermined or institutional rates (not including more than cost of acquisition and development costs of land) for specified housing or integrated housing projects. This would be the prerequisite for the scheme.• Costs of land can also be intermediated by attracting private developers to build on their land, by granting zoning-related incentives such as land use conversion, extra FAR for the construction of affordable houses to be allotted by the State/UT government (where ever infrastructure permits densification), etc..• Cost of construction can be held down by construction through no profit no loss organizations or at reasonable profit; and by beneficiaries directly accessing institutional funds for construction, namely the loans offered by public sector banks, available at reduced interest rates to individual buyers (as announced under the economic stimulus package).



18TH HOUR

JNNURM:STRATEGY OF THE SCHEME• Cost of construction can also be driven down by planning layouts which mix EWS/LIG/MIG with HIG houses and commercial layouts, and cross subsidizing through the premium earned on the sale of HIG and commercial spaces.• States/UTs could reduce costs of housing further by charging a reduced stamp duty to a maximum of 2% for affordable houses (LIG) and nil (0%) for EWS under this scheme and/or charging reduced tax rates on inputs for affordable housing• Cost of construction can also be driven down by adopting appropriate construction technologies.



18TH HOUR

JNNURM:MAIN FEATURES OF THE SCHEMEThe scheme modifies the guidelines of JNNURM (BSUP) for providing Central Assistance to States to incentivise land assembly for affordable housing to promote development of projects for a total of 10 lakh affordable housing units by provision of central assistance of 25% for the cost of provision of civic services for projects for affordable housing at an approximate cost of Rs.5,000 crores to Central budget.The main features of affordable housing in partnership scheme are:

a. A project approach would be followed. Projects prepared by urban local bodies/urban development agencies/housing boards/improvement trusts/other agencies which may be designated as ‘implementing agencies’, accompanied by duly approved layout plans and maps to scale would be posed for sanction to the State Level Steering Committee and then the Central Sanctioning and Monitoring Committee set up for BSUP.b. Land for an affordable housing project could be identified within municipal limits, or on the periphery or outskirts of towns and cities within jurisdictions of development or planning authorities.



18TH HOUR

JNNURM:The main features of affordable housing in partnership scheme are:

c. Projects with a minimum of 200 affordable houses would be entertained. d. Dwelling units built under this scheme would be a mix of EWS/LIG/MIG.e. The layout and specifications including design of the affordable houses to be built would be approved by the State/UT Government or its designated implementing agency.f. The sale price of dwelling units would have an upper ceiling in terms of Rupees per square metre of carpet area. This ceiling would be proposed by the States/UTs for different classes of cities for approval by the Central Sanctioning & Monitoring Committee.g. Beneficiaries would be selected and allotments made on a transparent procedure by the State / implementing agency, e.g. draw of lottery, based of detailed guidelines approved by the State/UT Government.



18TH HOUR

JNNURM:MAIN FEATURES OF THE SCHEME

h. As far as possible, beneficiaries would be selected in advance to beginning construction, so that the loan for construction can be availed directly by beneficiaries. A tripartite agreement between loanee, bank anddevelopment agency should enable facilitation of loan procedures for theindividual, and release to the development agency as per the progress inconstruction.i. EWS/LIG beneficiaries can be enabled to access loans under the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP), which provides 5% interest subsidy on loans up to Rs 1 lakh.j. Title to the EWS/LIG houses would be given as far as possible in the name of the woman. Where the land is at predetermined rates, title may be leasehold, subject to State/UT Government decision, with sufficient safeguards to ensure that the beneficiary is not dispossessed and the sale of the house to another name is not recognized or registered for a certain minimum period; within which transfer of the house should be permissible back to the designated (project) agency only, at cost of construction adjusted for inflation.



18TH HOUR


k. States/UTs/implementing agencies would make effort to ensure that at least 25% of the total built up/constructed area of the projects proposed is EWS/LIG units.l. In order to promote EWS/LIG dwelling units / cross-subsidize the cost of land, the project, with approval of the State/UT Governments may also offer zoning incentives such as land use conversion, additional FAR/FSI for the patch, with or without TDR, based on the prevailing market price of land and the cost of construction, provided the civic infrastructure at the site or the TDR sites is not put under strain.m. The State/UT Government may also permit a portion of the identified plot of land being used for construction of HIG dwellings or commercial purpose, on which the development partner can raise funds to crosssubsidize the construction of EWS/LIG dwellings.n. In the case of partnership with a private developer on Government land, it would be required of the State/UT Government / implementing agency to select the private party by a transparent bidding process.



18TH HOUR


o. If considered appropriate, the States/UTs may consider private lands under this scheme. Concessions and FAR, etc. would need to be judiciously designed by them to make it attractive on private lands. However, the project prerequisites will not be relaxed, and the project would not be entertained for sanction except through the State/UT Governmentp. Supervision of quality and timeliness of construction would need to be done by quality control mechanisms put in place by States/UTs. A three tier Quality Management System will be mandatory. The first level will be developing agency, second by the State level quality monitor and third level by a nationally empanelled third party inspection and monitoring (TPIM) agency. Involvement of beneficiaries in the project should be encouraged.



18TH HOUR

JNNURM:CENTRAL GOVERNMENT ASSISTANCEBased on the experience that housing colonies do not get occupied for want of civic service connectivities, Central Government assistance under this scheme will flow for the provision of civic services such as water supply including ground level/overhead service reservoirs, storm water drainage, solid waste management, sewerage including common sewerage treatment facilities, rain water harvesting, approach roads, electricity lines including electricity transformers, parks and playgrounds and other amenities.

Central Assistance under the scheme will be limited to least of following:• Rs. 50,000 per Dwelling Unit for all dwelling units taking EWS, LIG and MIG units together which are proposed in the project; and • 25% of the cost of all civic services (external and internal) proposed in theproject



18TH HOUR

Subject to the above, Central Assistance would be computed in the following manner:



18TH HOUR

*An Additionality of 12.5% may be provided for North Eastern States including Sikkim & Special Category States (Jammu & Kashmir, Himachal Pradesh & Uttarakhand).

Release of Central Government share would be in three installments to the State/UT Government or its designated agency on reimbursement basis (@ 5%, 50%, 25% respectively).

The last installment would be released after ascertaining the completion of construction and selection of beneficiaries.



19TH HOUR

Rajiv Awas Yojana (RAY)In pursuance of the address of the President of India, to both Houses of Parliament in June 2009 and the Prime Minister on Independence Day, in which the Government’s vision of a “Slum-free India” was announced, this Ministry began the process of formulation of a new Scheme – Rajiv Awas Yojana (RAY). This scheme aims at providing support to States that are willing to provide property rights to slum dwellers. The Scheme proposes to address the problem of slums in a holistic and definitive way adopting a multi-pronged approach focusing on bringing existing slums within the formal system and enabling them to avail of the same level of basic amenities as the rest of the town; redressing the failures of the formal system that lie behind the creation of slums; and tackling the shortages of urban land and housing that keeps shelter out of reach of the urban poor and forces them to resort to extra-legal solutions in a bid to retain their sources of livelihood and employment.



19TH HOURRajiv Awas Yojana (RAY)

The parameters of the Scheme have been drafted after extensive consultation with Experts, Civil Society Representatives, Members of Technical Advisory Group, City Commissioners, State Secretaries, Central Ministries and Departments etc.

Rationale for the SchemeAs per Planning Commission estimates using NSSO 61st Round Data, an estimated 26% of urban population of the country (810 lakh in 2004-05) still subsists on incomes that are below the poverty line. Eighty percent of their meagre earnings go towards food and energy, leaving very little for meeting the costs of living in an increasingly monetized society. The majority of them live in slums and squatter settlements (estimated at 75.2 million in 2001), in inhuman conditions that deny them dignity, shelter, security, and the right to basic civic amenities or social services, in an environment in which crime, ill-health and disease frequently raise demands that draw them deeper into vulnerability and poverty; to which they are condemned by the failures of the current master planning system that provides little space for the poor for housing and livelihoods.



19TH HOUR

Rajiv Awas Yojana (RAY)Rationale for the SchemeThat about a quarter of the country’s urban population lives in notified and non-notified slums – higher in the metros, as high as 54% in Mumbai and 46% in Faridabad, 45% in Aligarh, 44% in Meerut (2001 Slum Census data) - is an indication of the iniquitous and exclusionary urban planning system, urban land management practices and land legislation that have not been able to adapt themselves to the pace or profile of indigenous urban growth; or to create space within the formal system of planned living and working spaces to accommodate the informal working classes. As urbanization grows, and the projected share of urban households rises in the next two decades from the current 28% to 50% of the country’s population, we may expect that slums will grow, seriously crippling the productive capacities of a growing number of people by the denial of basic services, shelter and security, increasing inequity and retarding the GDP potential of urban areas.



19TH HOUR

As components of JNNURM, the BSUP and IHSDP have so far achieved a modest success with the overarching aims of focusing State attention on the problems of inequity in urban areas, and drawing budgetary resources to the welfare of the urban poor. What JNNURM (BSUP and IHSDP) has not been able to do is to break the deep-seated bias against conferment of legal property rights to the urban poor. While some States are indeed willing to and have given legal title to property to the slum households, the larger numbers are still guided by the suspicion that conferment of title will enable the slum dweller to sell the property and create a fresh encroachment. It is in this regard that the Government announcements propose a policy change.

Present status of the schemeThe proposal of the scheme has been submitted for consideration of the Cabinet Committee on Economic Affairs on 10.2.2011.



19TH HOUR

Slum-free City Planning under RAYIn the mean time, the preparatory phase of RAY has already commenced from March 2010 and the States are being assisted to draw up their Slum-free Plans of Action to proceed towards the goal of Slumfree Cities/States in a systematic and time bound manner. Detailed Guidelines under the Slum Free City Planning Scheme have been issued and the states are being provided technical and financial assistance to prepare Slum Free City Plans. This scheme comprises all the preparatory activities such as slum survey, GIS Mapping of Slums and development of Slum free City and Slum Free State Plans with active involvement of experts having expertise in the areas of GIS, and Planning etc.Under the Scheme, a sum of Rs. 60 Crore has been released to 20 States for preparing Slum free City Plans.



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) Background:“Affordable Housing for All” is an important policy agenda of the Government of India. The Government of India has sought to create an enabling and a supportive environment for expanding credit flow to the housing sector and increasing home ownership in the country. As per the Technical Group set up by the Ministry of Housing and Urban Poverty Alleviation (MHUPA), Government of India. In year 2007, the estimated urban housing shortage was 24.7 million units. Of this shortage, 99% is related to EWS and LIG segments.In the National Urban Housing & Habitat Policy, 2007 a demand driven approach, ranging from subsidy based housing schemes to cost recovery cum subsidy schemes for housing through a proactive financial policy including micro-finance and related self–help group programmes, has been advocated.

EWS AND LIG PROGRAM:



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)BackgroundThe policy seeks to devise innovative housing finance schemes for targeting the two segments – EWS & LIG with suitable support from Central and State Governments to increase flow of finance for catering to housing needs of these segments.

The Government has approved an Interest Subsidy Scheme for Housing the Urban Poor (ISHUP). The interest subsidy scheme will also seek to supplement the efforts of the Government through the JNNURM to comprehensively address the housing shortage. The interest subsidy on housing loans for the urban poor will enhance affordability besides leveraging funds from the market for lower segments. Under this scheme, a subsidy of 5 per cent per annum will be given for loans of Rs 100,000/ - taken during the 11th Plan. The loan repayment period would be 15-20 years.



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)Salient Features of the SchemeThe Scheme will leverage flow of institutional finance for the EWS and LIG segment households and result in creation of additional housing stock of 3.10 lakh houses for EWS/LIG segments over the next 3 years (2009-12) out of which 2.13 lakh dwelling units are targeted for EWS housing and 0.97 lakh for LIG housing. Households with monthly income of upto Rs 3,300 (now revised Rs. 5000/-) are classified as EWS while those with monthly income between Rs 3,301 and Rs 7,300 ( now Revised between Rs. 5,001/- to Rs.10,000/- ) are termed LIG.The key objective of the Scheme is to enable EWS and LIG households to avail affordable housing loans for purchase of house/construction of new house.Beneficiary borrowers may choose fixed or floating rates (the consequences clearly explained to the borrowers by PLIs). An additional 1% p.a. maximum will be permitted to be charged by banks/HFCs if fixed rate loans are extended which will be subject to reset after a minimum period of 5 years.



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)Mortgage of the dwelling unit be accepted as primary security. However, there would be no collateral security/third party guarantee for loans upto and inclusive of Rs. 1 lakh excluding group guarantee.No levy of prepayment charges would be permitted.Banks/HFCs can also involve NGOs for lending to their group members without involving MFIs, to whom they can pay a small service fee for services rendered in terms of organisations and follow-up, the percentage to be determined by the Steering Committee.The Net Present Value (NPV) subsidy will be given to the lenders on upfront and quarterly basis. The NPV subsidy given to the lender will be deducted from the principal loan amount of the borrower, who will then have to pay interest to the Housing Finance Institution (HFI) at an agreed document rate for the whole duration of the loan



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)The advantages of this method is as under:The interest subsidy directly accrues to the benefit of the borrower upfront reducing his principal outstanding amount.The EMI for any beneficiary type is lower than in a situation where the interest subsidy is disbursed through the loan period quarterly.The transactional complexity of administering and accounting of provision of subsidy disbursal through quarterly loan periods as well as cost involved for the PLIs claiming subsidy periodically and National Housing Bank (NHB) / HUDCO on behalf of Government of India effecting payments, is reduced.The beneficial impact of this upfront subsidy on the acceptability of borrowers should be higher than in the case of periodical subsidy payment.The lenders prefer the upfront adjustment mechanism not only for reasons of administrative convenience but also for facilitating credit risk evaluation. This is because the borrower’s equity in the house goes up or the loan to value ratio comes down. This should also facilitate greater coverage of borrowers.



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)The Scheme will close in 2012, the last year of the 11th Five Year Plan Period (2007 -12). However, the loans extended in the last year will also have repayment period upto 20 years.

Under the scheme, preference (subject to beneficiaries being from EWS/LIG segments) will be given to Scheduled Caste, Schedule Tribe, Minorities, Person with disabilities and women beneficiaries in accordance with their proportion in the total population of city/urban agglomerate during the 2001 census.

NHB and HUDCO, as intermediary financial institutions, would be responsible for administering the subsidy to the eligible institutions and submitting utilization certificates from the PLI’s.



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)Achievements as on 31.12.2010 under Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) :The Ministry has been following the matter regularly with all the States and the steering committee of ISHUP has liberalized the guidelines to further popularize the scheme, namely:-• All loans extended by the banks w.e.f. 26.12.08 are eligible for claiming the NPV of Interest Subsidy under the Scheme.• The income ceilings have been revised to upto Rs.5000/- for EWS and Rs.5001/- to Rs.10,000/- for LIG households. Necessary amendments in MoU were made enabling recovery against NPA to be shared on pro rata basis between the GoI & Banks.• Inclusion of RRBs & Private sector Banks for the implementation of the ISHUP Scheme.• Self Help Groups (SHGs) have been approved to avail of the scheme.



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)• For the speedy implementation of the Scheme the Steering Committee in its 4th Meeting has approved that Public Sector Banks can undertake Income certification of beneficiaries subject to audit by CNAs.• Facilitation fee of Rs. 100/- per approved application under the Scheme can be extended to MFIs/CBOs/NGOs. Recently in the 5th meeting of Steering Committee of ISHUP , this facilitation fee has been raised to Rs. 250/- per approved application of the scheme.



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)1. Apart from the initiatives to simplify the guidelines and implementation of the scheme, the Ministry has also taken steps to disseminate information about the scheme and regular review of scheme. During the current Financial Year, a meeting was held with the State Level Bankers’ Committee (SLBC) conveners on 08.06.2010. The scheme was also reviewed by the Hon’ble Finance Minister in the recent meeting with Chief Executives of Public Sector Banks (PSBs) and Financial Institutions (FIs) held on 14.08.2010. A review meeting of ISHUP under Secretary (HUPA) was organized by the Ministry on 17.08.2010 with the secretaries of states and CMDs of banks to sensitize the implementation of the scheme.



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)2. As result of persuasion of the Ministry, State Level Bankers’ Committee (SLBC) meetings have already been held in 15 States namely Andhra Pradesh, Karnataka, Tamil Nadu, Rajasthan, Kerala, Haryana, Madhya Pradesh, Jammu and Kashmir, Uttar Pradesh, Punjab, Jharkhand, Pudducherry, Delhi, Himachal Pradesh and Gujarat. The Ministry has also held meeting with all major state governments namely Gujarat, Kerala , Karnataka , Andhra Pradesh, Tamil Nadu , Madhya Pradesh , Maharashtra, Haryana, Punjab ,Uttar Pradesh , Rajasthan , Orissa , Chhattisgarh and Jammu & Kashmir to bring them on board/ review the progress.



19TH HOUR

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)3. The states of Andhra Pradesh, Karnataka, Tamil Nadu, Rajasthan and Kerala cumulatively had assigned a total target of 6,29,121 beneficiaries at the inception of 2010-11. The State Governments of Madhya Pradesh, Tamil Nadu and Karnataka have initiated simplified system and processes for filing the applications and processing, Government of Andhra Pradesh which had initially indicted a target of 2.32 lakh houses, has not generated targetted number of claims. In case of Rajasthan the result of recently announced policy is yet to materialize. In rest of the States, the progress is very slow.4. Till 31st December , 2010 cumulatively 3865 beneficiaries have been covered under the Scheme incurring cumulative expenditure of Rs. 2.69 crores.5. The progress of the Scheme has been reviewed through meetings with Principal Secretaries and other stakeholders including bankers in various States. The states of Madhya Pradesh, Tamil Nadu, Karnataka and Andhra Pradesh have put the system in place by facilitating easy mortgage and plan approval procedures for takeoff of scheme.



19TH HOUR

Prime Minister's New 15-Point Programme for the Welfare of Minority Communities:Ministry of Housing & Urban Poverty Alleviation is concerned with following 2 points of the 15-Point Programme:Point 7 (b)The Swarna Jayanti Shahari Rozgar Yojana (SJSRY) consists of two major components namely, the Urban Self-Employment Programme (USEP) and the Urban Wage Employment Programme (UWEP). A certain percentage of the physical and financial targets under USEP and UWEP will be earmarked to benefit people below the poverty line from the minority communities.Point 12.Under the schemes of Integrated Housing & Slum Development Programme (IHSDP) and Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the Central Government provides assistance to States/UTs for development of urban slums through provision of physical amenities and basic services. It would be ensured that the benefits of these programme flow equitably to members of the minority communities and to cities/slums, predominantly inhabited by minority communities.



19TH HOUR

Prime Minister's New 15-Point Programme for the Welfare of Minority Communities:However, under Swarna Jayanti Shahari Rozgar Yojana (SJSRY), Physical and Financial targets have been assigned by the Ministry of Minority Affairs only under the USEP component of Swarna Jayanti Shahari Rozgar Yojana (SJSRY) for Minorities. As under UWEP, no national Physical/financial targets have been fixed, no targets have been earmarked for the minority communities under UWEP.



19TH HOUR

Basic Services to the Urban Poor (BSUP) / Integrated Housing & SlumDevelopment Programme (IHSDP)1. Under the Basic Services to the Urban Poor (BSUP)/Integrated

Housing & Slum Development Programme (IHSDP) components of Jawaharlal Nehru National Urban Renewal Mission (JNNURM), 15% of the Central allocation is to be earmarked for the Minority Communities. States/UTs were to give priority to the cities/slums, predominantly inhabited by minority communities (i.e. where minority population is 25% or more), while submitting Detailed Project Reports (DPRs) for the assistance under Basic Services to the Urban Poor (BSUP)/Integrated Housing & Slum Development Programme (IHSDP).



19TH HOUR

Basic Services to the Urban Poor (BSUP) / Integrated Housing & SlumDevelopment Programme (IHSDP)2. Ministry of Housing & Urban Poverty Alleviation has issued appropriate instructions to States/UTs pertaining to Sub-Mission-IIBasic Services to the Urban Poor (BSUP) and Integrated Housing & Slum Development Programme (IHSDP) – that priority be accorded to towns and cities having substantial concentration of minority opulation with regard to utilization of funds by ensuring that Detailed Project Reports (DPRs) of such towns and cities include areas inhabited by minority communities in order to effectively implement the New 15-Point Programme for Minorities.



19TH HOUR

Basic Services to the Urban Poor (BSUP) / Integrated Housing & SlumDevelopment Programme (IHSDP)3. As on 31-12-2010, under BSUP, out of the total 477 projects sanctioned for a cost of Rs. 26844.28 Crore, 103 projects costing Rs. 5588.05 Crore are for minority concentration towns indicating 20.82% flow of funds to minority concentration towns/ cities.

4. As on 31-12-2010, under IHSDP, out of the total 966 projects sanctioned for a cost of Rs. 9711.60 Crore, 132 projects costing Rs. 1817.38 Crore are for minority concentration towns indicating 18.71% flow of funds to minority concentration towns/cities.

Other Programmes:Projects/Schemes for the development of North Eastern States, including Sikkim under 10% Lump-sum provision earmarked for this Purpose.And many more



20TH HOUR

Cooperative housing sector:What is a Cooperative?The International Cooperative Alliance (ICA) in its Statement on the CooperateIdentity, in 1995, defines a cooperative as “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.”



20TH HOUR

Cooperative housing sector:What is a Housing Cooperative?Housing cooperative has been defined as: “A legally incorporated group of persons, generally of limited means, pursuing the same cause of meeting the common need of housing or its improvement based on mutual assistance.

In such a cooperative, the membership is voluntary and control is democratic, and members make an approximately equal contribution to the capital required”.

A housing cooperative is a legally established association, that is owned and democratically controlled by its members for the primary purpose of improving their living conditions.

Democratic control by residents, open and voluntary membership, limited return on membership investment, the expansion of services beyond merely the supply of housing to the provision of a wide range of community services, and a strong emphasis on self-help and cooperative action are the basic characteristics of housing cooperatives.



20TH HOUR

Cooperative housing sector:Background:Bangalore Building Co-operative Society, the first housing co-operative in India, was founded in 1909 in the State of Karnataka (former State of Mysore). In 1913, the State of Maharashtra (former State of Bombay) set up a non-official body, the Bombay Co-operative Housing Association, which did a pioneering job in propagating co-operative housing. Among many milestones, the association elaborated model by-laws which were used in the organisation of several housing co-operatives. It was also the first one to get the financial participation of the state in the affairs of the housing co-operatives.

The biggest housing co-operative in India is Vidarbha Premier Co-operative Housing Society located in Gandhi Sagar, Nagpur, in the State of Maharashtra. It was founded in 1930 by 12 members. By March 2008, the membership had reached 40,000 members. It is financially completely self-sufficient.



20TH HOUR

Cooperative housing sector:The Co-op Housing Movement:The co-operative housing movement in India is a four tier structure:

housing cooperatives, district federations, state-level federations and the national federation.

Set up in 1969, the National Co-operative Housing Federation of India (NCHF) is the nation-wide organization for the co-operative housing movement in India. Founded by 6 state-level federations, NCHF takes the lead in promoting, co-ordinating and facilitating the development of housing co-operatives, along with providing guidance to housing cooperatives and their federations.

NCHF is also sponsored by the Ministry of Housing and Urban Poverty Alleviation which enables them to receive regular grant-in-aid.



20TH HOUR

Cooperative housing sector:The function of the 26 state-level federations is in playing a significant role in the pursuance of co-operative strategy. It not only provides financial assistance to housing co-operatives in their respective jurisdiction but they also provide guidance on technical matters and assist them in the general co-ordination and supervision of activities, such as assisting them in obtaining building materials.

As an example, the Pondicherry Cooperative Housing Federation has set up a Pondicherry Co-operative Building Centre whose main objectives are to “set up manufacturing units of building materials, purchasing bulk quantity of materials for construction of buildings and sell them off to members and public at fair and reasonable price”.

An idea to promote the use of certified low cost materials helps them to bring a more cost-effective methodology to the construction process. The centre has received several awards for its work.



20TH HOUR

Cooperative housing sector:Organizational structure:The 26 state-level federations are members of NCHF. The constituent team of NCHF includes a 23 member strong Board of Directors, including one chair, two vice-chairs, 19 directors and a NCHF managing director. A seven member Executive Committee also assists the Board.

The cooperative housing sector advocates for a multi-objective approach. NCHF has submitted a proposal to tackle the problem of slums with the “Concept of Housing the Slum Dwellers through Co-operatives”. NCHF proposes to develop multi-purpose cooperatives addressing the link between employment, housing, and poverty. The Concept was debated in 2004 and endorsed by the then Ministry of Urban Employment and Poverty Alleviation.



20TH HOUR

Cooperative housing sector:FinancingHousing co-operatives are financed by members’ shares and savings and assistance from their federations or other financial institutions.

The federations obtain financing from:• Shares from the housing co-operatives, the States and other co-operative institutions;• Loans from the Housing and Urban Development Corporation (HUDCO), theNational Housing Bank (NHB), the Life Insurance Corporation of India (LIC), commercial and cooperative banks, deposits from members;• Debentures guaranteed by the Government.

State Federations borrow loans from funding agencies and make them available to their affiliated primary housing cooperatives as well as individual members. They charge interest margin of around 1% to meet their administrative costs..



20TH HOUR

Cooperative housing sector:The importance of cooperatives and cooperative like organizations has been acknowledged by the United Nations Human Settlements Programme (HABITAT).

The paragraph 56 of HABITAT Agenda recognises cooperatives as stake-holders at local level that compliment and supplement the governmental efforts in meeting the housing needs of the people.

The Agenda makes specific recommendations on housing

cooperatives. It particularly focuses on cooperatives’ role in mobilizing financial resources for providing housing for the poor.



20TH HOUR

Cooperative housing sector:The paragraph 82 of the Agenda states as under : To create new housing finance mechanism, as necessary, Governments at appropriate levels should: Harness the potential of non-traditional financial arrangements by encouraging communities to form housing and multi-purpose community development cooperatives, specially for the provision of low-cost housing;

Review and strengthen the legal and regulatory frame-work and institutional base for mobilizing non-traditional lenders;

Encourage, in particular, by removing legal and administrative obstacles, the expansion of savings and credit cooperatives, credit unions, cooperative banks, cooperative insurance enterprises and other non-bank financial institutions and establish savings mechanisms in the informal sector, particularly for women;



20TH HOUR

Cooperative housing sector:The paragraph 82 of the Agenda states as under : To create new housing finance mechanism, as necessary, Governments at appropriate levels should: Support partnerships between such cooperative institutions and public and other financing institutions as an effective means of mobilizing local capital and applying it to local entrepreneurial and community activity for housing and infrastructure development;

Facilitate the efforts of trade unions, farmers, women’s and consumer organisations, organisations of people with disabilities and other associations of populations concerned to set-up their own cooperatively organised or local financial institutions and mechanisms;

Promote the exchange of information on innovations in housing finance;

Support non-government organisations and their capacity to foster the development, where appropriate, of small savings cooperatives.



20TH HOUR

Cooperative housing sector:What are the different types of Housing Cooperatives?

Housing cooperatives at the primary level can broadly be classified into four groups as detailed below:

Types of housing co-operatives:o Tenant Ownership Housing Societies:

The land is held either on leasehold or freehold by the societies; the members own the houses, and are leaseholders of the land.

They must strictly comply with regulations regarding subletting and transferring of houses but they can build their houses according to their own needs and taste.

o Tenant Co-Partnership Housing Societies: The societies hold both land and building, either on

leasehold or freehold basis, and members have an occupancy right upon paying an initial share and a monthly rent.



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Cooperative housing sector:What are the different types of Housing Cooperatives?

(c) House Mortgage Societies: Such societies lend money to their members for

construction of houses. The members have to make their own arrangements for

building their houses. This type of societies are really credit societies as

distinguished from other credit societies as per the objects for which they lend, the duration of the loan and the security they demand.

(d) House Construction or House Building Societies: Societies of this type spend money on behalf of the

members for building the houses, and the houses are handed over to members when ready and the money spent is recovered as loan.



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Cooperative housing sector:What are the advantages of Housing Cooperatives?Advantages attached to cooperative housing are enumerated below:(i) A housing cooperative is neither a public nor a profit seeking organisation. Its principal objective is to eliminate economic exploitation as it is controlled by members only.(ii) Contrary to public housing, cooperative housing provides opportunities to its members to control the house designs at the planning stages. Moreover, the maintenance of the estate is also in the hands of members, which leads to maintenance at lesser expenses and in a better way.(iii) Cooperative housing satisfies quantitative as well as qualitative aspects of housing. As it incorporates a high degree of participatory involvement of members, the housing stock created is more responsive to user’s needs than those supplied through any other sub-system.(iv) Housing cooperatives, besides, generating a sense of responsibility amongst users for post-occupancy maintenance, also provide the necessary mechanism for effecting it.



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Cooperative housing sector:What are the advantages of Housing Cooperatives?(v) Project cost efficiency is demonstrated on account of the concerted efforts of members to keep overheads to a minimum and to effect economy in construction by other means as well.(vi) Loans are arranged by the cooperatives for their members and the members have a collective responsibility for its repayment. So, a proper check on the repayment of loans and other charges is maintained.(vii) The members have got the right to vote and participate in the affairs of the cooperative, and as such they develop a sense of self-reliance and self-respect.(viii) A cooperative is a small community by itself and hence can undertake several social activities such as organising special programmes, arranging health services, improving the ecology of its area, improvement in social behaviour and mental health, etc.(ix) Other economic activities such as consumer cooperatives, banks, clubs and other common services which are needed by the community can be established by a housing cooperative in an economical manner.



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Cooperative housing sector:The subject of Cooperative Societies is enlisted under the State List of the Constitution of India and therefore, the States are empowered to make respective laws on Cooperative Societies.

Other characteristics of Indian housing co-operatives are:Basic Amenities: They manage the basic amenities like water, electricity, sanitation.Education and Recreation: They build and manage schools, libraries, parks, and gardens.Health and Lifestyle: They can develop programs for the benefits of their members such as health programs, youth programs, collective transportation arrangements, and ecological improvement programs.They are managed by paid/honorary staff and an elected board of directors.



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Example: The Chennai Metropolitan Co-Operative Housing Society Ltd:It was registered as early as 12-03-1912 and stared its function on 05-05-1912.

The Area of Operation of Society is Confined to CMDA limits and all villages lying within a radius of 12 kms from CMDA limits. The area of operations of the Society extends upto Kancheepuram and Thiruvallur Districts for formulation of house site schemes.

The Main Activities of the society are: 1. Accepting Deposits from the members 2. Advancing jewel loans upto a maximum of Rs.2.0 lakhs. 3. Advancing of loans for construction of new houses and for discharge of prior debts on the Mortgage of houses up to a maximum of Rs.7,00,000/- 4. Promotion of House Site and flat Housing Schemes.



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The Chennai Metropolitan Co-Operative Housing Society Ltd:The Chennai Metropolitan Co-operative Housing Society has announced 100% DTCP approved plots named Metro Sameera garden at Nenmeli Village in Kanchipuram District near Chengalpattu Railway Station. These are residential plots located off GST Road and is located just 4 km from the Chengalpat Railway Station and GST Road. There are more than 500+ plots available for booking. The price being Rs. 446 per sq. feet. The stamp duty of 8% will be exempted if you book the plots now. The plots are located in between the 50 feet and 30 feet road throughout the 500+ plots. The Maharishi Vidhya Mandir School is located inside the layout.



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The Chennai Metropolitan Co-Operative Housing Society Ltd:

Features of Metro Sameera GardenPlots on main road with bus servicesRoads with street lights and avenue treesFully fenced throughout with concrete and wire fenceChildren’s play area and fully developed park inside the layoutStorm water drains have been implemented



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Private sector housing:All the private construction companies like DLF, Hiranandhani, L & T, and all companies and their construction activities forms part of this.

Expectation of private sector:Typically, Indian households used to save up and take a very minimal loan to make a house. It has been a scenario in 1960s & 1970s, subsequently home loans have been available and people started availing home loans for construction of houses, for the past 20 years or so in a big way. Indian literacy rate has been continuously growing up and migration towards urban centres has been continuously on the rise resulting in lot of demand for accommodation in the urban area.

With this background, role of Private sector in housing has started in a big way.



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Private sector housing:Initially the Private sector comprised of small time builders, who can raise finance of their own for purchasing the land and develop housing, catering to a small group of buyers. This has been a trend at first stage of housing during 1970 & 1980.Subsequently larger plots of lands were available and the size of the projects has also started growing resulting in medium sized projects in the next 20 years.

When the certain tax incentives were available to the buyers and builders large scale housing has been the focus for the past 5 to 10 years. It has been mainly due to large scale buyer demands for good housing. The housing scenario in India is now being classified as tier one, tier two & tier three cities. In the tier one category, all the major metros are clubbed and tier two and three having huge potential is becoming major hubs in the near future.



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Private sector housing:By geography, the land size vs. population of India reveals that the availability of land is scarce, hence it makes the role of Private sector going for large sector housing difficult. However, in the recent past, the tax incentives scheme for housing encouraged the Private sector to go for large space of land and coming out with huge projects.

Infrastructure is the frame works through which essential services like, road, rail, communication, education, health care, drainage, water supply could be provided. This basic need shall be provided by the Governmental agencies only.



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Private sector housing:The Private sector has to address the major issues in bringing down the cost of construction by way of innovation methods to reduce cost as well as time requirement for completion of project. The standardization of the units will be a good answer in cost cutting and timely completion. Thus the Private sector can participate in end to end land development, housing, energy sector and water supply to make the Private sector in the housing a cost competitive and satisfy the needs of the users.

The Government should process the township or housing development of larger land on a faster track. Certain tax incentive should also be made available to such projects and provision of housing in this project development for economically weaker section from about 10 to 20% with tax incentive will give a head way in subsidizing the sale of such weaker section requirement for housing.



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Private sector housing:The Government should take the initial lead in acquiring land and builder developer can be given the parcels of land at market-determined rates. So that it will lead better transparency in land availability and will enthuse lot of builders to participate in such projects.

Government shall take initiative in redevelopment of dilapidated housing structures both in the Government owned and private housing societies.

The Private Sector shall be allowed to participate independently for such re development scheme. The Government shall draw an agreement, which shall bear certain share in the finalized scheme of housing and commercial development for the Government.



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Private sector housing:Government can identify the available vacant lands in an around Chennai City, and also the slum areas covered horizontally with a thin population. Such areas can be developed well with all basic amenities for a vertical residential development.Private developers can be invited for a joint development on the basis of sharing the constructed apartments. All the proposed residential units shall be of basic minimum size. The Government can allot/sale their share of apartments and the developer \can sell his portion to any public.This system will certainly provide good quality apartments because the developer has to maintain his credibility and sell his share of apartments.



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Private sector housing:We request certain facility from the Government for a better participation in low cost housing.1. Relaxation in processing fee, development charges, sales tax and other expenses for the construction.2. Service tax relaxation.3. There can be exemption in income tax on housing development of exclusive smaller residential units as it was done for large extent housing development under section 80-IB.

Basic fundamental activity like permission for the plan for land development or Building proposal shall be time bound and quicker to facilitate further process of implementation.



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Private sector housing:The delay in obtaining such permission has a direct impact on final cost, which depends on:a) The land prices are on increasing mode. Due to unmatched supply demand equation.b) Global economy has eventually resulted in rising bank interest.c) Slow down in various prominent sectors have dampen the job security of Common man and it has resulted in real estate investment also.

To avoid increase in cost of projects due to above factors, Government shall implement more simplified systems in processing the property development proposals.

Documents

Unit 3Housing Programmes in India