Maharashtra Budget 2017-18: 14% cut in housing budget

The current allocation of funds for housing for fiscal year 2017-18 by Maharashtra has seen a 14% cut against the previously allocated fund. Considering the state has only used 9% of the previously allocated funds, right to housing activists have sounded an alarm. “While at the same time local authorities in Mumbai have started evicting those very slums who were promised basic amenities before the BMC election, the cut in the current housing budget, the underutilisation of the previous fund and the eviction drive only suggest the indifference of the government towards a grave housing problem,” said Neha Jaimati of the Ghar Bachao Ghar Banao Andolan (GBGBA).

The table below explains the cut in the current budget and the underutilisation of the previous budget:

Pointing out how not a single house unit has been built under the 'Housing For All' scheme in a period of almost three years, Bilal Khan of GBGBA observed, “The mechanism set by the Maharashtra government to solve housing problem will only cater to the need of the few needy people while a large chunk of people will be still facing the same problem. The Maharashtra draft housing policy has estimated a shortage of 19 lakh housing units. The government aims to construct these units by the year 2022 in accordance with the Central ’Housing For All’ scheme. However, the slow pace with which the government is working to complete the aims tells a different story.”

The rules formulated by the Maharashtra Government to implement the Central HFA scheme are such that it will provide housing to those who can happily spare Rs 8,000-10,000 per month as EMI for the housing obtained under this scheme. While it has emerged from the survey being conducted by the Ghar Bachao Ghar Banao Andolan in various slums in Mumbai-where the most of the housing shortage is calculated- that there is a huge population which earn less than 8,000-10,000 per month. These are the slums which are not protected by the government and are not eligible for alternative housing. These slums are now being evicted immediately after BMC election.

Eviction was begun on Tuesday at the Four Bungalows slums in Andheri's Siddharth Nagar but, due to people’s resistance, saw work stopped temporarily. Had pressure not built, more than 600 families would have been made homeless. During the election campaign several political parties promised of all the basic amenities in this settlement. BMC even sanctioned water connection and community toilets to this settlement very recently. Around 300 children going in the local DN Nagar BMC schooling have their exams going on.  “Even before the 'Housing For All' scheme is implemented, several thousand are being made homeless,” lamented senior activist Medha Patkar, who added, “This is precisely because a scheme cannot guarantee protection of right but a law. Hence a separate law is needed to protect housing rights and ensure every needy person a security of minimum housing and livelihood.” According to her, the ongoing eviction drives in Mumbai suggest how the state government is aware it cannot meet the target of 19 lakh housing units by 2022 nor can it cater to each needy household. “They are hence trying to get rid of their responsibility by simply evicting people. We condemn this tacit policy of the government to address the housing problem and demand practical policy to solve housing problem.”

Others like Bilal Khan of GBGBA pointed out how the ‘Pradhan Mantri Awas Yojana-Housing For All’ (PMAY-HFA) had falsely raised hopes among urban poor living in shanties and slums across urban India. “As the name of the scheme suggests, it claims to provide housing to each needy person by the year 2022. However, a deeper study of the guidelines of the scheme would reveal that whether the needy persons will get the benefits of the scheme or not.”

The scheme has four major verticals: rehabilitation of slum dwellers with participation of private developers using land as resource; promotion of affordable housing for weaker section through credit linked subsidy; affordable housing in partnership with public & private sectors; and subsidy for beneficiary-led individual house construction.

The first vertical will apply to major slums built on government land having a high market value. A private builder will be selected for redeveloping the slum in-situ. The eligible slum dwellers will get a free house under this vertical in lieu of their slum structure. A portion of the land will be used to construct the rehabilitation building while another portion of the land will be given to builders to make profit out of it. In this arrangement, only those slum dwellers will get the alternate tenement in lieu of their structure who are eligible. The eligibility will be decided on the basis of ‘cut-off-date’ which will be proved by certain documentary proofs possess by the structure holder in the slum. State governments will decide their own cut-off-date.

A person dishoused due to the first vertical of the scheme has little chance of alternate accommodation under the remaining verticals. The second vertical provides for interest subvention for a home loan. The government will provide an interest subvention of 6.5% per annum for a loan upto Rs. 6 lakh for a period of 15 years. PM Modi,  while addressing the country on December 30, 2016, apparently announcing the end of ‘demonetising era’, tried to woo the urban poor by introducing two new categories of income level to get interest subsidy. As per the two new categories, people earning Rs 12 lakh per annum will get 4% interest subsidy on a loan amount of Rs 9 lakh, and the Rs 18 lakh per annum income category will get a 3% subsidy on a loan amount of Rs 12 lakh. The period of loan repayment for these two categories will be 20 years. “People ineligible for a free alternate tenement under the first vertical will try for a home loan to buy a house under the ‘affordable housing segment.’ An ‘affordable house’ will cost nothing less than Rs10 lakh in major cities like Delhi-Mumbai. Suppose a person gets a loan of Rs 10 lakh and the government waives all interest on the loan for the full amount removing the limit of Rs 6 lakh and the loan repayment is to be made in a period of 15 years, then an EMI would be made more than Rs 5,000 per month. Add a maintenance charge of Rs 1,500 per month of living in a building. A total of Rs 6,500 will be spent in EMI and maintenance every month,” points out Khan. He asks, “What if those people ineligible in the first vertical are Below the Poverty Line? By the government's own admission a BPL family earns not more than Rs 2,250. How will they spent Rs 6,500 per month if their monthly income is only Rs 2,250? The possibility of getting a loan will finish straight away if they don’t own up a land to be mortgaged for a loan.”

He underlined how there was no scope for an ineligible BPL landless family to get housing in any of the above two verticals of PMAY. “The third vertical provide for promotion of affordable housing of in a housing project having minimum 250 housing units. 35% housing will be reserved for Economically Weaker Section (earning upto Rs 3 lakh per annum) in such housing projects. Beneficiary will get a Central assistance of Rs 1.5 lakh per house. If we are considering Rs 10 lakh as the cost of a housing in this segment in a city like Delhi/Mumbai then the beneficiary will have to pay the remaining Rs 8.5 lakh by deducting Rs 1.5 lakh from Rs 10 lakh. If we suppose that the beneficiary will opt for a loan, then the government will provide interest subsidy for the loan amount of Rs 6 lakh and remaining amount will be repaid at the non-subsidised interest rate. If no interest is charged from the beneficiary, the EMI will again come amount Rs 5,000 for a 15-year period loan. Now, again, how will a BPL landless family will afford this loan?”

Now, imagine the case of the landless BPL family in the fourth vertical, offers Jaimati. “The guidelines for the fourth vertical is assistance to individual eligible families belonging to EWS categories to either construct new houses or enhance existing houses on their own to cover the beneficiaries who are not able to take advantage of other components of the mission. This sounds as if government is really concerned about providing house to urban poor. This vertical applies to those who already own a legal house and additional assistance will be provided to repair or enhance the house. But when a BPL landless person has been dishoused already, how will this vertical help this person? Is this not the mockery of the misery that a person will face after being dishoused due to PMAY?”

Patkar also lamented the zero involvement of a non-state actors (NGOs) to ensure transparent and non-discriminatory implementation of the scheme. “The absence of this provision sets a blueprint of a massive corruption.” She also pointed out how the PMAY is silent on rehabilitation of pavement dwellers, those residing adjacent to big drains, water pipelines, on forest land, in areas marked as CRZ and so on. "The people living in these settlements are simply branded as ‘encroachers’ and that’s what make government get rid of its responsibility to ensure housing to urban poor which is basic human need. By commodifying a basic service like housing, we are denying a needy person of his/her right to housing which has been recognised as part and parcel of ‘right to life’ by the Supreme Court of India.”

Already, the UN special rapporteur on adequate housing has presented a report based on her visit to India last year to UN Human Right Council. One of the recommendations of the report calls for a national law in India to ensure ‘right to housing’.