Thursday, September 6, 2012


The project is facing financial crunch due to inflation

The Union government has set a mission to curb expenditure which is increasing due to cost escalation of its flagship housing programme for the BPL segment, Indira Awas Yojana (IAY) – thanks to inflation. Rural Development Minister Jairam Ramesh hammering home the need for increased central funds for the programme has largely fallen into the deaf years of the Ministry of Finance (MoF) so far. The inflated allocation is Rs 75,000 per unit from the earlier sum of Rs 45,000, which as per the Rural Ministry is the need of the day, but the Finance Ministry finds its not as important and has kept the entire agenda at bay.

According to Jairam Ramesh, the proposed amount is a Planning Commission’s recommendation made in 2011, with further addition of allocation that will reach the total cost to Rs 80,000 for hilly areas and another Rs 9,000 needed to construct toilets should be incorporated in the IAY budget. And he left no stone unturned to convince the MoF that it’s not his economic propaganda but an indepth research made by Central Building Research Institute, Roorkee, published in 2009. However, despite such plans, nothing much was done. IAY is riddled with leakages which lead to huge cost and time overruns. On the contrary, huge unspent amount lying with various state governments is another indicator of the poor implementation of IAY. For instance, the total unspent balance is a humongous Rs 2,500 crore with a state wise allocation of Rs 825 crore in Gujarat, Rs 581 crore for Karnataka, Rs 550 crore for West Bengal, Rs 427 crore for Odhisa, Rs 420 crore for Assam and Rs 200 crore for Uttar Pradesh.

So in totality, the Union government's refusal for more funds coupled with unspent allocation and corruption have worked as the main obstacles for the proper implementation of the programme. India must take a cue from the Singapore government, which under the HDB (Housing and Development Board) Annual Report, 1962, has provided well-built and well-designed houses to the lower income groups at affordable cost. Also, under HDB Annual Report 1964, there are provisions for lower middle income groups to own houses facilitated by the Singapore government. The programmes are totally corruption free and have insulated the beneficiaries from exclusion, exploitation and unsanitary living conditions; all of which are enormous dry holes for the Indian government. These cropped up housings in Singapore represent well maintained, modern, and quality self-contained flats with landscaped environment that are streets ahead of the residential units built in India under IAY. The Singapore’s housing constructions for the poor is centralised that help it escaping the curse of duplication and fragmentation of work and lack synergy among various departments, which is a testimony in India.

India’s governmental non-performance is a ‘must be’, which leads to another option of contracting it to the private players. After sorting out the land units, the government must outsource the construction of the houses to private parties with freebees to them in the form of tax rebates and other incentives. Th at would focus on the overriding issue of timely allotment as also the quality and efficiency of the programme. The monetary efficiency can also help escaping formulaic implementation with cost savings and other benefits. And to top it all, it provides the residents with a comfortable and healthy environment that all of us seek.


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