The timing has been right. The Karnataka government has
cleared the affordable housing policy (KAHP). The Cabinet has passed the
earlier housing policy of October 2013 by incorporating sensible modifications
and additions in its efforts to provide "affordable homes" to the
needy.
The urgency of a concrete policy by the government was more
pronounced to immediately align with Prime Minister Narendra Modi's pet policy
of Pradhan Mantri Awas Yojana (PMAY) under the credit-linked subsidy scheme
(CLSS) which has the mission of providing two crore and four crore houses in
the urban and rural areas, respectively, by 2022.
The KAHP in its new avatar lays stress on the state
participation through Public Development Agencies (PDAs) - Rajeev Gandhi Rural
Housing Corporation Limited (RGRHCL), Karnataka Housing Board, BDA, BBMP,
Karnataka Slum Development Board. The RGRHCL is doing significant work in the
affordable housing space.
The KAHP is applicable only to urban areas. The beneficiaries
would be below poverty line (BPL), economically weaker sections (EWS) and low
income group (LIG) households living as residents in urban areas for a period
of not less than one year, fulfilling certain income criteria. The final
selection of the beneficiaries under affordable housing schemes is by the
state- level nodal agency (SLNA).
The KAHP has designed seven models of affordable housing to
cater to different sections of the target group. The purpose of the
beneficiary-led house construction and enhancement is to upgrade kutcha houses
(walls with grass, mud, unburnt bricks) to pucca houses (brick, concrete, with
mortar and metal). The beneficiaries will get a grant of Rs 1.5 lakh under the
PMAY scheme.
For the beneficiary led new construction - specially designed
for construction of a new pucca houses with direct financial assistance - will
get additional financial support through the various ongoing schemes of the
state government under the Basava Housing, Indira Awas Yojana, Vajpayee urban
housing scheme along with the popular Credit Linked Subsidy Scheme (CLSS) of
the Central government.
Two other models are dedicated for upgrading and
redevelopment of slums by providing basic infrastructure such as water,
drainage system, roads and lighting. Three more models - plotted development of
sites with houses, group housing and township projects and affordable group
housing - in partnership with private developers are thoughtfully and
scientifically designed to boost the housing stock to cater to the urban poor.
The paradigm shift and game changer of KAHP is the active involvement and
participation of private developers under the PPP model by granting benefits
and incentives to the builders.
The State government seems to have understood the dynamics of
housing activity. Providing housing to the needy can no longer be the sole
monopoly of the state. The builders, by partnering in these
"non-remunerative ventures," get adequately compensated by the
government by way of additional Floor Area Ratio (FAR) equivalent to the
built-up area of the AHUs and additional transferable development rights
(TDRs), by which builders can build extra floors and sell at commercial rates.
The KAHP proposes reduction in stamp duty from 7 to 5.5%,
single window appro-vals with clear turnaround time for sanction of building
plans, land conversions, issuance of commencement, completion and occupancy
certificates. Housing activity through linkages with 200 ancillary industrial
units will have multiplier effect on the economic development of Karnataka with
positive impact on employment, income and savings.
There are certain critical inconsistencies, anomalies and
show stoppers in the KAHP. The eligibility definition of an affordable housing
unit is between 161 sft and 646 sft carpet area on a plot dimension 269
sft-1076 sft. The Central government under the CLSS has removed this
requirement as cost of construction varies from place to place.
There is an anomaly in the income criteria too. Annual income
of household up to Rs 1.5 lakh and Rs 3 lakh is the criteria considered for EWS
and LIG by KAHP whereas it is double at Rs 3 lakh for EWS and Rs 6 lakh for LIG
under CLSS. This is serious as it affects the very cherry-picking of the
beneficiaries.
A large portion of households in the income band width of Rs
3-6 lakh per annum gets excluded from the scope of the KAHP. This will impact
the beneficiaries who are eligible for an upfront subsidy of Rs 2.2 lakh by way
of direct transfer under the CLSS if the AHU is in one of the 231 towns
specified in the 30 taluka of Karnataka.
Woman as
title holder
The KAHP should also incorporate woman of the household as
one of the title holders of the property to be a beneficiary under the CLSS
which has a rider that the applicant should not own any other residential
property in the country.
Though the policy attracts private developers with additional
TDRs and FARs, the condition that the FAR has to be "consumed" on the
same site on which the AHUs are built for their commercial use will neither be
attractive nor practical. Coexistence of residents of different economic and
social strata would be difficult and can lead to social strife.
The affordable housing projects should be taken up within the
city on government land. Under the PPP, the government should offer land at
reasonable rates within the radius of 10 km to private developers to build
quality affordable houses. Otherwise, the fate will be similar to certain
projects wherein the houses are lying vacant and in dilapidated condition for
want of occupancy.
The government should eliminate corruption which is rampant
in the beneficiary selection stage. Also to be eliminated are middlemen and
multiple funding of the same asset. Quality construction needs to be adhered to
through fair practices code. Otherwise, the noble intentions of the new housing
policy will be defeated.
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