Roof for all
The immediate focus of the new government at the Centre seems to be fulfilling the housing needs of the poor. And the launching of a new scheme for housing the urban poor appears to be a step in that direction
Pradeep Sharma

Interest Subsidy Scheme for Housing the Urban Poor n House of at least 25 sq mts for EWS income group. For LIG, it is of at least 40 sq mts n Subsided loan of Rs 1 lakh for EWS flat. n Subsided loan of Rs 1.6 lakh for LIG flat. n Repayment period of 15-20 years.

Roti, kapda aur makaan — these are the basic needs of man. After taking care of the roti and kapda needs of the poorest of the poor through the National Rural Employment Guarantee Act (NREGA), the Congress government led by economist-turned-politician Manmohan Singh seems to have spared a thought for ‘makaan’ (housing) needs of the poor under its flagship ‘affordable housing for all’ programme. And for that, the Central government has come out with the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP).

“The innovative scheme is part of the commitment of the Central government to provide affordable housing to the poorest of the poor in the urban India. In fact, it would go a long way in mitigating the housing shortage for poorer strata of society,” according to Pawan Bansal, Union Cabinet Minister.

Sources said the erstwhile Congress-led government had prepared the blueprint for the unique scheme before the 2009 Lok Sabha elections. However, apparently on account of the model code of conduct for the elections, the government could not take political advantage out of the housing scheme. With the new central government in place, the stage is set for its implementation with various ministries collaborating in giving final shape to the scheme.

In fact, the ball for the implementation of the ISHUP was set in motion recently with a high-level meeting of the housing secretaries of the states and the union territories in New Delhi.

Various modalities for scheme, aimed at providing cheap home loan to the Economically Weaker Sections (EWS) and Low Income Group (LIG) for acquisition or construction of house, were discussed at the meeting. The scheme is an initiative of the Union Ministry of Housing and Urban Poverty Alleviation in collaboration with the National Housing Bank (NHB) and Housing and Urban Development Corporation (HUDCO), which will act as nodal agencies for the disbursement of the subsidy.

 Households having an average monthly income up to Rs. 3,300 (EWS) and between Rs 3,301 to Rs 7,300(LIG) would be covered under the scheme. The subsidy will be 5 per cent per annum on interest charged on the admissible loan amount for the EWS and LIG over the full period of the loan for construction or for acquisition of a new house.

The scheme envisages provision of a housing loan, with subsidised interest, for a period of 15-20 years with a maximum limit of Rs 1.00 lakh for EWS dwelling unit of at least 25 square meter and Rs 1.6 lakh for LIG house of at least 40 square meter.

The Chandigarh Housing Board (CHB), which will play the role of the facilitator in Chandigarh, will pass out the benefits envisaged to the EWS/LIG beneficiaries in forthcoming housing plans under the said scheme in Sector 63, Maloya and Dhanas in Chandigarh, it is learnt.

“The scheme is an effort to create an enabling and supportive environment for expanding credit flow to the housing sector and for increasing home ownership in the country,” Sanjay Kumar, Housing Secretary, Chandigarh Administration, who attended the meeting at New Delhi, informed The Tribune.

The sources said the scheme would be the largest housing scheme for the poor at the national level. Various housing boards and other government agencies have been coming out with affordable housing for the poor from time to time at the state level. With affordable housing, particularly for the poor, still a far cry in India, the scheme should get a tremendous response from the poor in the backdrop NHB and HUDCO beng the nodal agencies for the housing projects, Zirakpur-based real estate developer Sunil Bandha, opines.

Bihar plans housing scheme for poorest

Patna: Rickshaw puller Haria Bhuiyan and daily wage labourer Mangru Manjhi are elated. Bihar Chief Minister Nitish Kumar has said a housing scheme for the poorest of the poor is being finalised and will be implemented soon. 

The Maha Dalits think that dream of owning their own home is a bit closer to reality. For generations, the Maha Dalits — as the poorest of the Dalit sub-castes are called — have been dreaming of their own homes. It has remained a dream with people like Manjhi, 46, and Bhuiyan, 42, struggling to feed their families after earning Rs 100 on a good day.

Manjhi, who has a small thatched hut in a village in Jehanabad district, 50 km from here, was waiting at a roadside teashop for the day’s employer. Somebody read out the news report about the housing scheme being finalised to him and he erupted in joy.

“We were told that Hindi papers published news that Nitish Kumar is serious to provide land and houses to Maha Dalit families,” an elated Manjhi told IANS near the tea stall at Gandhi Maidan in Patna.

“A house of our own will change the mindset of our children, our future. It is big news,” Manjhi said. “Our forefathers died dreaming of their own house, but it seems their dream will be fulfilled soon.”

Bhuiyan has been spending his nights on the pavement. “If the news is true, it will fulfil our dreams. My father, grandfather and his father died without a proper roof over their heads,” he said, flashing a smile after learning about the ‘big news’.

Manjhi and Bhuiyan are among the thousands of poor, landless and homeless Dalits in Bihar who see the government decision as a beginning of a new life for them.

A government commission set up two years ago for the welfare of certain Dalit groups, which are socially and educationally more backward than others, painted a bleak picture of their lives in its first interim report submitted a few months ago.

Dalits constitute nearly 15 percent of Bihar’s 83 million people. The commission identified 18 of the 22 Dalit sub-castes, including Musahar, Bhuiyan, Dom and Nat, as the most backward. They constitute 31 percent of the Dalit population in the state.

On Wednesday, Nitish Kumar discussed with top government officials to finalise the modalities of the implementation of the special scheme launched last year to give 120 sq metres of land to the poorest families in the state. The government has also promised to provide funds to these families so that they can build their houses. “Now the Lok Sabha elections are over, Nitish Kumar at a meeting with the members of the Maha Dalit Vikas Mission directed to speed up the implementation of the scheme,” an official in the chief minister’s office said. The mission has identified the number of families who would benefit from the schemes, according to the official. Nitish Kumar asked his officials to re-check and complete the survey by June end.

Nearly 160,000 Maha Dalit families would benefit from the housing scheme. The government has earmarked Rs 8.15 billion for the purpose. Around 9,500 acres of land is required. At present, however, the government has only 4,055 acres. The rest will be acquired soon, officials said. — IANS

Time to usher in change
Chitleen K Sethi

For the past 15 years, the Punjab government has shirked undertaking rent control reforms in the state on one pretext or the other. However, with the state entering the fourth year of implementation of the Jawaharlal Nehru Urban National Renewal Mission (JNNURM), the government has now no option left but to bring about the much awaited and much needed reforms in its archaic rent control system. Failing which the state would not be entitled to the crores of rupees, which the centre gives to the state to fund the various JNNURM projects.

“Amendment of rent control laws is one of the mandatory reforms suggested in the mission. States are expected to implement the reform within the mission period. It is widely recognised that the existing rent control laws are in favour of the tenant. The objective of the reform of the Rent Control Act is to bring out amendments in existing provisions for balancing the interests of landlords and tenants. Reform in the rent control laws will go a long way in improving housing situations in urban areas, lessen distortions in the market, and have beneficial impact on urban finances,” states the JNNURM primer for states.

Punjab’s efforts

Punjab has been humming and hawing over the implementation of the Punjab Rent Bill passed unanimously by the Vidhan Sabha in 1995, which got the President’s assent in 1998. The new act was to replace the East Punjab Rent Restriction Act, 1949, but is yet to be notified by the state government.

The 1949 Act had also come up following an attempt by the Government of India to reduce the exploitation of tenants by landlords. Though this legislation aims to provide payment of fair rent to landlords and protection of tenants against eviction, the archaic act has led to a fixing of rent to be paid and since then despite the realty boom and escalating prices of property the rents continued to remain the same.

In 1992, the Government of India circulated a model rent control legislation to all the states asking them to either modify the existing act or repeal it and moot fresh ones. Based on this model, the Punjab Rent Bill was mooted to regulate the landlord-tenant relationship, their mutual rights and obligations and more importantly, the grounds of eviction of tenants.

Following the President’s assent the then Chief Minister Parkash Singh Badal constituted a committee under the then Minister for Local Government Balramji Dass Tandon to report on its implementation. Days before Badal’s government changed in early 2002 the report was submitted to the Governor. The Tandon Committee recommended that the 1949 Act be amended rather than implementing a new Act and proposed a Punjab Rent Restriction Act 1949 Amendment Bill 2002.

When the matter came up for consideration in the new government led by Capt Amarinder Singh, a technical committee under DR Banga, the then Director Local Bodies, Punjab, to consider the Tandon report was being set up. Banga reported in November 2002, “The Punjab Amendment Bill, 2002, is a patchwork on existing legislations. Large-scale amendments instead of simplifying the existing legalisation may lead to complications as apprehended in the policy papers.”

“On the basis of its deliberations and scrutiny of provisions of both legislations the committee has no hesitation in recommending that the state government may consider implementing the Punjab Rent Bill 1995,” added the Banga committee.

Nothing was done for almost three years on this report. In May 2006 when a division bench of the Punjab and Haryana High Court ordered that the Act be notified within six months, Amarinder was forced to constitute a cabinet sub-committee under Rajinder Kaur Bhattal to once again consider the implementation of the Act. Bhattal and her team rubbished the Act on the grounds that the ground reality had changed a lot since the Act was drawn due to which it “cannot be notified in its present form and should be recast.” This was October 2006 and now three years later the players remain the same but precious little has been done to re-cast the act or update its provisions.

The current situation

The present Akali-BJP government has formed a committee headed by a former bureaucrat, Manmohan Kalia. However the committee has not been given any terms of reference to start their work till date. Kalia died in January this year and no one has been appointed in his place to head the committee.

In November last year, following a meeting of senior officers of the local government with the Punjab Chief Minister, the matter was kept pending. No reasons were given why the matter has been kept pending or what the intentions of the government are in this regard.

Sources, however, add that like it happened in some other states, political will for carrying out this particular set of reforms is clearly missing mainly due to vote bank politics. Lakhs of tenants, especially those who have been holding on to properties worth crores in prime areas and are doling out only a meager amount as rent, would be the most affected due to these reforms. The political pressure of this lobby is substantially high and they do not allow any reforms to take place.

In February, following an execution writ filed in the high court in this matter, the government sought the Advocate General’s opinion. The AG’s opinion of April 5 stated that it is settled law and no mandamus can be issued to bring in force an act. “It must have been brought to the court’s notice that the act needed to be recast before it can be notified,” it further said.

“If we want the JNNURM grants from the Centre for these projects we would have to undertake the reforms as we have promised to. There are not many options before us,” said a senior officer of the state.

Tax tips
Buy a flat to get tax exemption

Q. I have an independent house that has been held by me for the last 10 years. I intend to sell it out very soon, as the area available is now too small for the entire family. I want to buy a ready-to-occupy flat with sufficient accommodation to accommodate the entire family. I do not have any other house or plot of land. Please let me know whether I would be charged any tax on the sale consideration of the house.

— RS Adlakha

A. Any profit arising from the sale of a residential house would be in the nature of a capital gain, which is taxable under the provisions of the Income Tax Act, 1961. In case the residential house has been held for a period of three or more years, the capital gain would fall in the category of a long-term capital gain assessable at a lower rate of 20 per cent, in addition to applicable surcharge and education cess.

The Act provides for the exemption of long-term capital gain from tax, in case the amount of such capital gain arising from the sale of a residential house is utilised for the purchase of a residential house or a flat. The purchase has to be made one year before or within two years of the date of sale. The exemption can also be availed in case such capital gain is utilised for construction of a residential house within three years of the date of the sale of the residential house. Such long-term capital gain should be deposited in a bank under the capital gains scheme before the date of filing the Income-tax return. The amount so deposited has to be utilised for purchase or construction of a house within the time limit referred above.

Invest in capital gain bonds to save tax

Q. I own a small flat which is under my occupation for the last 20 years. I also own a plot of land on which one can build approximately 6,000 sq ft. I intend to sell the plot of land. Can I save the capital gains tax if I follow any of the two options:

By investing the amount of capital gain in capital gain bonds; or

By purchasing a flat with the amount of capital gain.

— Ashok Chander

A. Your queries are replied hereunder:

You can invest the amount of capital gain in the acquisition of capital gains tax saving bonds. The investment has to be made within six months of the date of sale of the plot. I may add that the provisions of the Act require the investment in such bonds to an extent of Rs 50 lakh only in a financial year. Thus, in case the capital gain earned is up to the said amount, you would not be chargeable to capital gains tax provided the investment in bonds is made within six months of the date of the plot.

The capital gain arising on the sale of plot would not be chargeable to tax, in case net consideration (i.e. full value of consideration as a result of sale reduced by any expenditure wholly and exclusively in connection with such sale) is utilised for purchase or construction of a residential house. The purchase has to be effected one year before or within two years of the date of sale. The house can be constructed within three years of the date of sale.

Avail deduction on stamp duty paid

Q. Recently I had purchased a flat and paid the stamp duty and registration fee amounting to Rs 1 lakh. However, the receipt in respect thereof has been issued in the name of the previous owner. Can I get the deduction for the above Rs 1 lakh under Section 80C of the Act.

— Mohd Hussain

A. Section 80C of the Act provides for the deduction of amount paid towards the stamp duty, registration fee and other expenses incurred for the purposes of transfer of such property in favour of the purchaser. The receipt for the payment of the registration fee, etc. should be in the name of the purchaser and in case there has been an error on the part of the registering authority in issuing the receipt in favour of someone else it would be advisable to get the correction done. This would enable you to claim the necessary deduction under Section 80C of the Act.

Calculation of perquisite value

Q. I had joined an organisation in Chandigarh in the financial year ending on March 31, 2009. Due to the provision of furnished accommodation pending, I was made to stay in a hotel for a period of about three months. The amount of perquisite value of such accommodation has been added to my salary which is the total charge paid by the company to the hotel. Please advise me if the perquisite value as computed by the company is correct.

— Jatinder Nath

A. The perquisite value where accommodation is provided by way of room/rooms in a hotel, is required to be computed at following of the two provisions:

a) 24 per cent of the salary paid or payable for the period during which the accommodation is provided in the previous year; or

b) Amount of charges paid or payable by employer to the hotel.

The figures with regard to your salary are not available in the query. You can work out the perquisite value on the basis of the provisions given hereinabove.

Maximum of Rs 1,50,000 available for deduction

Q. Is the interest payable on amount borrowed for the construction of a house meant for residential purpose allowable in totality? Is there some restriction in this regard? Please advice.

— BS Raut

A. There is a maximum ceiling of Rs 1,50,000 for the deduction of the interest payable on the amount borrowed for the purposes of construction/acquisition of a house. The same is applicable if the following conditions are satisfied:

Amount is borrowed on or after April 1, 1999 for acquiring or constructing a property.

The acquisition or construction is completed within three years, from the end of financial year in which the capital was borrowed.

The person extending the loan certifies that such interest is payable in respect of the amount advanced for acquisition or construction of the house or as re-finance of the principal amount outstanding under an earlier loan taken for such acquisition or construction. If the amount is borrowed for reconstruction, repair or renewal, the maximum deduction allowable on account of interest is Rs 30,000 only.

This column appears weekly. The writer can be contacted at sc@scvasudeva.com

Sound foundation
Once a house is built, it becomes a difficult and costly affair to make changes in it. Therefore, it is important that much of the thinking goes into all aspects of construction in advance
Jagvir Goyal

Checklist When the structure is completed, carry out a check before proceeding further. See that all the following items have been completed: n Excavation of trenches for foundations to designed depth. n Anti-termite treatment of foundations. n Laying of mud mat or lean concrete. n Brickwork and RCC work in foundations. n Fixing of sanitary pipes before laying DPC. n Backfilling in foundations. n Laying of DPC. (Not in doorways) n Doing Vertical DPC. n Fixing of chowkhats. n Fixing Rainwater pipes. n Brickwork up to Lintel level. n Laying of RCC lintels. n Brickwork up to roof level. n Bearing plaster on brick walls. n Shuttering for slab and beams. n Fixing fan boxes, laying conduits. n Laying steel reinforcement. n Laying the RCC in slab and beams n Curing of RCC work. n Staircase work. n Removal of shuttering.

A stitch in time saves nine. Timely precautions taken during the construction of a house may save the owner from many post-construction troubles. Not only that, it is always easier and simpler to nip the evil in the bud than facing a monster later on. Here is a list of some such precautions which if taken may help the house owner really enjoy their fruits:

Avoid choosing low-lying plot: To provide strong and stable foundations to your house, these must be taken below the natural ground surface. Therefore, don’t choose a low-lying plot for your house. It will invite extra expenditure due to the extra filling work involved. The foundations shall become heavier as these have to be taken below the natural ground level. A foundation must go at least two feet deep below the ground. If the building is taller than 20 feet, this depth further increases. If unavoidable, pay lesser for the low-lying plot to cover the extra cost of filling work and heavier foundations.

Avoid choosing waterlogged plot: Again, if the area is waterlogged, the foundations will be heavier due to less bearing capacity of soil. Fear of termite and dampness rising in the walls will always prevail if the plot is located in such an area. Therefore don’t choose a plot located in waterlogged area.

Do pre-construction anti-termite treatment: It is always better to have pre-construction anti-termite treatment done for the house as the termite always rises from the soil and should be eliminated there itself. After completing the excavation for foundations, get a container of Chloropyrifos and prepare a solution by mixing it with the water. Instructions on the bottle or container will tell the concentration of the liquid and the amount of water to be added to it. Spray this mixture on the bed and sides of the foundation trenches by using five liters of solution in one sq m area. You must remove all the vegetation and organic growth from the soil. Later, when the foundations have been raised and the soil has been back filled around them to level the ground, again spray the solution on the filled up ground.

Use gumboots during excavations: During excavation for foundations be careful, as a snake or scorpion may appear at any time. If the soil is moist or waterlogged, chances of their appearance are more. Ask the labour to use gumboots during excavation work. Keep knowledge of nearest hospital or dispensary where antidotes are available. In case a snake bites or a scorpion stings, rush the victim to hospital immediately.

Care for side slopes: Again during excavation work, always provide proper slope to sides of trenches. Don’t stand at the edge of excavated trenches nor allow any labourer to stand there. If the soil is a bit loose, a side may collapse any time and a person standing on the edge may fall inside. Also, persons working inside trenches may get buried below the collapsed soil. Don’t park any mixer or machine at the edge of a trench.

Don’t lay DPC in doorway: When the brickwork has reached plinth level and DPC is to be laid, take precaution that DPC is not to be laid in the doorways. In the doorways, it is the floor topping that is extended. If you will lay DPC there, it will always be visible and will look very odd.

Don’t leave unsupported walls: While doing brickwork never leave an unsupported wall at the end of day’s work. Such a wall may collapse any time if wind velocity is high during night. See that all connecting walls are raised together and difference in height of any two connecting walls is not more than three feet when the work is closed. Also see that the walls at right angles are tooth-locked with each other.

Erect safe scaffolding: Safety in construction is one area often relegated to the bottom rung of priorities by the builders. Irreparable loss of money, manpower and progress may occur whenever scaffolding fails, a roof collapses or a fatal accident takes place at the site of work. Many builders have undergone the experience that the loss of the life of a worker in an accident at a site takes away the initiative and the morale of the working force to a new low. Therefore, always use safe and sturdy scaffolding to avoid accidents at site.

Check slab supports: Doubly check the supports below shuttering before laying the RCC slab. Carry out this check yourself. Tell shuttering contractor plainly that he would be responsible for any incident if occurs. See that no shuttering plate is supported on the walls. Be very careful when the slab is to be laid at a double height. In such cases, use only pipe supports, as wooden lengths if used may collapse any time. Never fill packing material between a support and shuttering plate to fill the gap. Always leave a carpenter below the shuttering to keep a watch on shuttering plates during concreting of slab. If you are using RCC columns, see that their vertical reinforcement is kept well supported till the foundation concrete is laid. Otherwise it may fall down over someone.

Beware of temporary electric wires: Take care of electric wires run from the temporary connection to various rooms, to the carpentry yard, mixer, etc. Insulation of these wires may come off causing electric shock to someone who may step on the naked wire. See that these wires are not lying on the ground but are run over temporary wooden poles. Take special care when curing of concrete work, brickwork and plaster work is being done.

Use vibrator correctly: During concreting of slab and beams, see that the vibrator being used for compaction of concrete is shifted gently from one place to other. Sometimes, a single person handles its shifting and its weight being too much for him to lift, he shifts it with a jerk and a throw, causing impact on the shuttering plates. Also keep care that the needle hose is not interfering with labour’s movement. Also see if the side planks of beams are properly fixed. Otherwise a plank may fall flat if a labourer puts his foot on it, making him fall and sustain injury from the steel reinforcement laid on the shuttering.

Look for safe ladders: Give due attention to the ladders erected for going up. If the ladder is rested against a freshly built wall, see that the brickwork has gained sufficient strength. If it is rested against a girder or pipe, see that it is well tied to it. Most neglected part is the arrangement at the top of ladder for stepping from the last step to the top of shuttering. See that a well-supported platform is erected there, sufficient supports are available to take a grip while stepping off the ladder and no fear arises in a person’s mind while stepping up.

About removal of shuttering: Take precautions during removal of shuttering and supporting pipes. Put a man on guard. Tell him not to allow anyone near the room where formwork is being removed. Tell the men put on removal of plates and planks not to throw them from height. Someone may get injured and your shuttering supplier will not accept back the damaged plates.

Save PVC pipes from heat: If you are using PVC pipes for water supply or sanitary, stack them in shade. Don’t stack them in more than seven layers. Put smaller diameter pipes inside bigger diameter pipes for safety and space. Also store all paints and PVC pipe fixing solvents in shade.

Once the structure is complete, many activities are to be taken up in parallel. It is difficult and costly to make any changes at that stage. It is, therefore, better to carry out above check.

Go ahead, happy building!

The writer is deputy chief engineer, civil, PSEB. He can be reached at www.jagvirgoyal.com

Reviving realty sector
Real estate developers plan lock-in clause to keep speculators and investors at bay, thereby attracting only genuine buyers. This will not only curb jacked-up property prices, but will also help people find a dream home for them, says Sanjay Khurana

The real estate sector, which is reeling under the global economic slowdown, may recover in the next three months as demand for housing has improved due to price correction, says industry body Assocham.

The developers are hoping for some policy actions in the upcoming Budget to revive the sector, which they feel, would be key for the speedy recovery.

According to an Assocham report, majority of the 25 real estate firms surveyed are sensing a quick revival in the sectoral activity within the next three months as developers’ strategic shift towards affordable housing and a significant price correction in the housing projects has pepped up the sale of residential property. 

About 92 per cent of the developers considered affordable housing as the most dominating segment to shore up the demand in real estate sector. At a time when luxury housing, SEZs, retail and commercial space were witnessing steep contraction in demand, affordable housing was the single most resilient segment, it added.

Meanwhile, according to another report, many real estate companies, such as Tata Housing, Omaxe, DLF and others, are planning to introduce lock-in periods of up to one year for their mass housing projects. This means buyers will not be able to sell their properties within a certain period after booking it or they will have to pay penalty if they do so. Realtors are doing this to discourage those investors or speculators, who, after bargaining with the developers, purchase properties in huge volumes at discounted prices, and later resell them at prices lower than those available to individual buyers, creating problems for the realtors as it hit their profit margins.

Sunil Bandha of Zirakpur-based ONS Developers, when contacted, said “It is a very good proposal, as only genuine buyers will come forward and buy property instead of investors and speculators. This will also avoid bulk buying in the market.” He added that though none of the developers in the tricity (Chandigarh, Mohali, Panchkula) had introduced this lock-in clause in the housing projects so far, but he hoped that it would certainly boost the sagging realty sector in the long run.

He further informed that as many as 60 to 70 per cent of apartments (already sold and ready-for-possession) in the Zirakpur area were lying vacant.

He further disclosed that after the recent Lok Sabha elections, there is a revival of positive sentiment in the realty sector. As far as prices are concerned, he said, they were down by 20 per cent as compared to prices prevailing in 2007 and 2008.

The fizz is out
Realtors in Himachal Pradesh are fast losing interest in pursuing their projects. The state government’s indifferent attitude towards many issues that ails the realty sector has been a major reason for this
Rakesh Lohumi

The private colonisers who made a beeline to make an entry into the hill state, in the wake of the industrial boom, are a disappointed lot. There are few takers for thousands of flats built by them and, in fact, those who have applied for license for raising colonies are not pursuing their case anymore. Four years ago, there was a mad race for registration under the Apartments and Property Regulation Act, which was specially enacted to encourage the private sector.

The Himachal Urban Development Authority (HIMUDA), which is the nodal agency under the Act, registered 221 companies. However, over the past four years only 38 licences for the construction of colonies have been granted under which about 9,278 flats are coming up, mostly in the Baddi area. Over the past one year, only three licenses have been granted for projects in Kulu, Dharamsala and Kasuali.

Most of the 4,000 flats for which licenses were given three years ago have been completed, but only few of these have been sold out. As per the information available from HIMUDA, only about 700 flats have been sold so far. The situation was discouraging even during the boom time and it has only worsened following the global economic slowdown. While there is a huge demand for housing accommodation in and around Baddi, not many are keen to own property in the area.

The reasons are not far to seek. Bereft of basic amenities like good schools, health institutions, quality power and roads, it is not considered a place worth living, not to speak of owning property. To call Baddi a township will be a travesty of facts; it is nothing more than a huge industrial slum. Further, the workers and low-paid employees who require accommodation do not have the financial resources to buy flats and they are also not keen to settle down in such a place away from their native village. On the other hand, executives and other high-paid staff, who could afford to acquire expensive flats, prefer to live in Panchkula, Chandigarh and Mohali, and like to invest in these cities.

With Section 118 of the State Land Reforms and Tenancy Act, which debars non-agriculturists from acquiring property in the state, in place, the real estate business hasn’t been able to flourish in the state. Unregulated construction activity only made things worse as huge multi-storey structures transformed verdant slopes into concrete jungles. Consequently, monstrous buildings have come up on steep slopes, which are not fit for construction. Most of them do not have proper approach roads and lack parking facility. Worse, there is no room for providing even the basic civic amenities like water supply and sewerage as structures have been allowed to come up virtually one over the other in violation of the building bylaws, usurping even the mandatory setbacks.

The ultimate sufferer is the purchaser who has to do without the basic civic infrastructure. Some of those who purchased from private builders in and around Shimla have been running from pillar to post to secure the basic amenities. In such a situation it is hardly surprising that about 30 to 40 per cent of the flats constructed in and around Shimla are unoccupied.

The problem has been compounded due to the inability of the government to take deterrent action against the violators of building bylaws. There are over 13,000 unauthorised structures in the state but hardly any building has been demolished. Instead, the government has been framing illegal retention policies to regularise unauthorised constructions, which has only encouraged the unscrupulous builders who thrive at the cost of law-abiding citizens.

It seems that the government lacks political will to pull down illegal buildings; otherwise, it would have made provision for acquisition of illegal portions to check wilful violation of building bylaws. The acquired properties then could have been used for providing accommodation to government employees and other purposes.

REALTY BYTES
Unitech plans affordable houses

New Delhi: Undeterred by the body blow it received due to the slowdown, Unitech has announced plans to construct 20,000 affordable houses at a cost of Rs 1,700 crore to become India’s numero-uno realty company within a year.

“We made a mistake of only focusing on top two three per cent of India’s population. Now we want to reach the masses... enter into budget and affordable houses... we will be the biggest player in the housing segment,” said Unitech’s managing director Sanjay Chandra.

“We plan to construct 20,000 affordable housing units over the next two years... these will be low-cost homes with prices ranging between Rs 10-15 lakh,” he said, claiming that they would become the largest realty player within a year. Currently, Unitech has a land bank of about 8,000 acres covering 500 million sq ft. Its rival DLF’s land bank has come down to 425 million sq. ft. in the last quarter of 2008-09. Both Unitech and DLF suffered the most due to the meltdown and had been forced to go for distress sale of the assets to keep their finances under check even though shares of the two plunged dramatically in the last six months.

DLF’s share price had hit a 52-week low of Rs 124.15 in February 2009 from a high of Rs 614.90 in May 2008. Unitech’s share price also plunged to a low of Rs 21.8 from a high of Rs 267.5 in the past one year. “People do not look at land bank any more. What our aspiration is, (is) to be definitely the largest player in housing that we can do by doing volumes... by this year we should be the largest realty player in terms of volume,” Chandra said.

He said the group’s biggest strength was that it had paid for all the land it owned and hence could launch new projects with least costs. — PTI

Low-cost housing lures investors

New Delhi: Real estate companies are eyeing innovative and affordable housing projects due to increasing demand and huge potential of the segment, especially in times of economic slowdown, believes industry body Assocham. “Despite the global financial crisis penetrating Indian markets leading to high credit crunch and hitching real estate players to slow down their investment plans, the sector was able to attract (the) highest investments with RBI’s timely stimulus packages and the concept of low-affordable housing,” Assocham President Sajjan Jindal said. In the last four months of 2008-09, affordable housing projects constituted 12.7 per cent share amounting to Rs 35,850 crore in the total planned capex for the realty sector, the survey said. However, with the commencement of FY’ 09, realty firms announced huge investment projects in the sector. In May 2008, total planned amount stood at Rs 90,219 crore due to credit crunch and high interest rates, the planned investment dipped in November 2008 to Rs 905 crore, Assocham said. Among the states, which attracted domestic investment in the realty sector in the last fiscal, were Gujarat, Haryana and Rajasthan, the survey said. — PTI