Though Madhya Pradesh government has claimed that 16 cities have joined RAY, the authorities have a daunting task to make the state slum-free by upgrading or creating new housing infrastructure in slum areas.
"RAY is at the pilot stage in the state. We have forwarded pilot project details to the state empowered committee. The committee would decide on these pilot projects, then we will go ahead accordingly. Cities like Sagar, Gwalior, Bhopal and Indore have forwarded pilot projects. Once pilot projects are completed, we will take feedback to decide next course of action," S P S Parihar, principal secretary, urban development department, told Business Standard.
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RAY authorises the state government to extend financial assistance and assign property rights to slum-dwellers for shelter and basic civic and social services.
However, minister for urban development and administration department Babulal Gaur yesterday announced, "Under Rajiv Awas Yojana, as many as 1,764 localities have been identified in six cities where 6,317 houses will be constructed with an investment of Rs 380 crore. A detailed project report of Rs 13,000 crore is being prepared. A total of 16 cities will participate in the project."
RAY was launched in Bhopal, Gwalior, Indore, Jabalpur, Sagar and Ujjain. Ten more cities later joined the scheme to rehabilitate slum-dwellers. The state government would chip in with 20 per cent to the total fund, to which the central government and urban local bodies contribute. The central government would provide half of the total project cost, while local bodies would contribute 30 per cent where infrastructure development is required. In case a of a housing project, the beneficiaries would have to contribute 30 per cent of the cost of the house.
The state government, according to Parihar, has cleared cases of those who hold lease or patta up to December 31, 2011. "Now they are entitled to hold a title against the government land on which they live, they can create equitable mortgage to seek a bank loan," Parihar said.
The leaseholders are entitled even if it is an encroachment on the government land. Yet the bank loan is an issue for state government. They are not ready to ready to fund the beneficiaries at less than 13 per cent interest rates.
Although Union government had decided to establish Rs 1,000-crore mortgage risk guarantee fund to facilitate lending for the urban poor housing. State has no clue about it.
Another issue that is a hurdle before the scheme is that RAY does not permit state authorities to handover title deed (of patta) before entire residential complex is completed. Thus a patta or lease holder of the government land cannot create mortgage in absence of necessary documents. Besides, bankers want a loanee to file income tax return.
"Only outcome of pilot projects would decide the fate of RAY in the state," Parihar added. Madhya Pradesh is first Indian state to start RAY.