Rajiv Awas Yojana to begin in 250 Cities


States Want Liberal Financial Norms given the Fund Constraints of States / Urban Local Bodies

The Housing and Urban Poverty Alleviation Minister Kumari Selja has said that the Rajiv Awas Yojana is a ‘RAY’ of hope to the Urban Poor and Slum dwellers of the country. Inaugurating the State Ministers’ Conference on Rajiv Awas Yojana here today she said, RAY envisions an inclusive and equitable urban India where every citizen has access to the basic civic and social services and decent shelter. The Minister said, in the Government of India, we are now following a rights based approach to address the fundamental inequities affecting the poor.  We have already enacted Right to Education and Right to Minimum Employment in rural areas, and are working on food security legislation.  She said, RAY builds on that holistic rights based framework and establishes the rights of urban poor and slum dwellers for decent shelter and basic services in the cities.

Here is the full text of Minister’s speech:

“I extend a warm welcome to all the State Ministers, Mayors and other distinguished participants to this very important Conference on the Rajiv Awas Yojana.  Rajiv Awas Yojana which is called RAY in short has the potential to radically transform the urban landscape of India and the living conditions of the urban poor. I am happy to inform you that our Government under able leadership of Hon’ble Chairperson UPA Smt. Sonia Gandhi and Hon’ble PM Dr. Manmohan Singh has approved this ambitious scheme.  This scheme is a ‘RAY’ of hope to the Urban Poor and Slum dwellers of the country. RAY envisions an inclusive and equitable urban India where every citizen has access to the basic civic and social services and decent shelter.

RAY has been conceived in response to the need expressed by many of you present here especially from the State Governments, to graduate to a comprehensive scheme to address the gamut of issues relating to slums and affordable housing for the poor. I would like to thank you all for your support and active engagement with us in designing the scheme. The task before us now is to make this vision of Slum Free cities come to life. This Conference has been organized precisely for the purpose of deliberating and discussing on the approaches and strategies for the way forward.

The world is urbanizing rapidly and India is also experiencing this demographic and economic transformation. As countries grow economically they also tend to urbanise. And India is no exception. India’s urban population is expected to double itself, growing from 286 million in 2001 to 573 million by 2030. Already provisional figures from the Census 2011 operations place India’s current urban population at 377 million, representing 31.16% of the total population.

Cities contribute to the GDP in a ratio which is more than double the ratio of population residing in them.  This contribution is only expected to grow in future. The importance of cities in the future growth of the country thus, cannot be overemphasized.

To fully harness the potential of this urban growth, we also need to address the challenges of urban poverty. As per NSSO estimates although the percentage of the urban poor declined from around 49% in 1993-94 to 25.7% in 2004-05, yet the urban poor have grown in absolute numbers from 76.3 million to 80.7 million in this period.  Majority of these urban poor live in slums and squatter settlements in conditions of squalor and deprivation. Slums are growing with the cities’ growth. The slum population in India is projected to be 95 million by next year, and 104 million by the year 2017.  Census 2011 would give more robust data about the slums very soon as it has collected the data of all the notified and non-notified slums about the availability of housing and other basic services to slum-dwellers.

We must recognize that the people that are counted as the urban poor today play a significant role in the functioning, productivity and competitiveness of cities.  At present the wealth and prosperity generated in urban centers is hardly ever shared with these people.  This trend has to be changed.

The UN-HABITAT reports in their latest “State of the World’s Cities” that the lives of 172 million slum-dwellers in Asia have been improved through various policies and programmes.  It also reports that this has been achieved chiefly through the efforts of countries such as India and China.

In India, credit for these achievements must be given to the efforts at all levels of government responsible for making this possible through various initiatives. The most important amongst them being the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) initiated in 2005. This mission made massive capital outlays for both city infrastructures as well as for integrated slum development and provision of basic services. Under the components of integrated slum housing and provision of basic services my Ministry is supporting construction of about 16 lakh houses across  the country at a cost of Rs 40,000 Crores.

JNNURM has been successful in achieving the aim of focusing attention on the problems of inequity in urban areas. There is now an acceptance at policy levels, both at the state and municipal level, that the emergence of new slums can only be prevented if we create sufficient affordable housing stock.

The feedback and responses from the States and the experience under JNNURM have been important inputs into the design of RAY. RAY seeks to not only address the problem of existing slums but also aims to redress the failures of the formal system that lie behind the creation of slums. RAY builds upon the foundation laid by JNNURM by endowing the urban poor with the legal right to land or dwelling space in the cities. This bold and new approach aims to move the urban poor from the informal to the formal economy and give them an equitable stake in the growth of the city.

In the Government of India, we are now following a rights based approach to address the fundamental inequities affecting the poor.  We have already enacted Right to Education and Right to Minimum Employment in rural areas, and are working on food security legislation.  RAY builds on that holistic rights based framework and establishes the rights of urban poor and slum dwellers for decent shelter and basic services in the cities.

RAY is envisaged as a reform driven scheme, consolidating and building on the reforms initiated under JNNURM. The first set of reforms are  related to legal empowerment of the poor, with the bedrock being the commitment and willingness of the State to assign property rights to Slum Dwellers through a legislation. The other reforms in this category are the other pro-poor reforms of JNNURM.  These are, earmarking of 25% of the municipal budget into a non-lapsable fund for the urban poor and the earmarking of 20-25% of developed land for EWS and LIG housing. The states are requested to address the last reform holistically by proper planning, institutional monitoring and adequately incentivising the private sector.

 The second set of reforms emanate from the understanding that we need to address the causes which constrain the creation of affordable housing stock and lead to emergence of slums. Under this arm of the reform package we are looking at amendments in Rent Control Acts to enable more rental housing stock entering the housing market.  We are also seeking review of land conversion, land development and land use policies and will like to facilitate the simplification of building approval processes for housing and other developments to increase the supply of developed land and reducing the transaction costs and delays.

The key reform that binds all the efforts under RAY is ensuring entitlement to shelter and universal basic services by unlocking the potential of the poor through the assignment of property rights to the slum dwellers.  To catalyse this, my Ministry has circulated a “Model Property Right to Slum Dwellers Act, 2011” to all the States/UTs for suggestions and comments. This model bill mandates the right to an affordable dwelling space, either in the name of the female head of household or, jointly in the name of the male head of household and his wife. Through this, we hope to be able to give every slum dweller a legal document of entitlement to the dwelling space and by extension, the provision of basic civic services and amenities. It is desirable that such rights be in-situ, as far as possible, to ensure linkage with livelihoods.

I hope during the course of the day, we will have fruitful discussions on the contours of the legal framework which is most suitable for the specific conditions prevailing in your States and Union Territories. Here, I would like to assure you that we are aware of the problems you are facing in dealing with the slums on central government lands.  We have actively taken up the matter with the concerned Ministries so as to arrive at a policy approach which will take into account the requirements of the concerned Ministries and also be in consonance with the inclusive spirit of RAY.

As requested by the states during the consultations, RAY has been designed to be sufficiently flexible and decentralized. Crucial decisions regarding the pace, modalities and institutional arrangements for implementation are to be made by the States and Union Territories. RAY is expected to cover a total of 250 cities by the end of the 12th Five Year Plan, and the Ministry would encourage you to include cities based on your aspirations and financial or resource capabilities in consultation with us. I would like to share with my colleagues that at the operational level RAY is to be executed as a partnership between communities, urban local bodies, state governments and the Government of India.

RAY builds on a number of lessons learned during the implementation of JNNURM. At the structural level, RAY moves from an ad-hoc project-based approach of JNNURM to a whole city, all slums and whole slum approach. Although the planning has to be done for all slums, the interventions could be undertaken in a phased manner. The State and City Slum Free Plans of Action are expected to lay down the road map for such implementation. In this context, I would urge you to think innovatively and design models which are suitable to different categories of the poor. Models giving various housing options to the urban poor ranging from outright ownership, rental and rental to ownership, etc will be encouraged.

Another key departure from previous initiatives is the strong focus and central role being given to slum communities. Under JNNURM we have seen that the projects having strong community involvement right from the planning stage were most successful in terms of timely completion, lower costs and better designs etc. RAY therefore advocates strong community involvement in planning, decision-making, implementation, monitoring and then asset maintenance. To institutionalize greater involvement of the urban poor and granting them greater ownership of the mission, my Ministry will promote a beneficiary and community-led construction model under RAY. Through this, we anticipate that the quality of construction will be greatly improved and the post-construction management and maintenance issues will be holistically tackled. With greater beneficiary involvement in the construction process, the dialogue between urban poor communities and the ULBs will be strengthened to allow for greater mutual accountability and an equal partnership and stake in the mission.   This approach may seem a little tough initially, but we all would admit that it is the most inclusive and sustainable approach.

RAY also envisages convergence of existing livelihood promotion schemes with it. SJSRY, the only employment scheme aimed at urban poor, could be immediately converged with RAY. The allocations under SJSRY are continuously increasing and I would advise the states and Union Territories to target it to RAY beneficiaries than to thinly spread it.

It is clear from the magnitude of the problem that Government funds alone will not be sufficient to cover the projected needs. The design of the RAY mission therefore has, built into its architecture, the support for Public-Private-Partnerships and other innovative models for slum up-gradation, redevelopment and new projects. Towards this end, the two existing schemes of Affordable Housing in Partnership and the Scheme for Interest Subsidy for Housing the Urban Poor have been dovetailed with RAY and are being revised to make them more effective.

We need to recognize in this context that housing is typically a continuum; with people gradually moving from dormitory or temporary shelters to rental or leased accommodation and from small one roomed to two or three roomed houses. We therefore need supply of diverse types of housing such as rental, transit, dormitories and lease-hold housing, through the Housing Boards and other public and private agencies.  We also need to ensure timely and easily accessible credit flows that can enable the EWS and the poor to incrementally upgrade their homes in line with their needs and resource capabilities.

A new innovative instrument to trigger credit markets for the urban poor called the Mortgage Risk Guarantee Fund is also being formulated to work in tandem with RAY .This fund will cover the risks of banks lending to the poor. We expect that this Fund would catalyse up to Rs 20,000 Cr of credit for housing in the coming years. We have also been successful in getting Affordable Housing Projects included under Section 35AD of the Income Tax Act, 2010 which provides tax incentives to the developers.  This would incentivize private developers to invest in affordable housing projects.

RAY is a new age scheme which has necessarily to be executed as a partnership between the communities, industry, financing institutions, Cities, State governments and the Government of India if it is to succeed. For this we would have to develop adequate capacity in the functionaries, at all levels, entrusted with its implementation. We must specially bring the political executives and officials, starting from the small municipal town to the municipal corporations, out of the confines of thinking within the existing municipal framework. We have to giving them exposure, training and make them aware of the best practices in India and outside. We have to create new Resource Centers and strengthen the existing ones. Unless we create strong institutions, delivery would not be able to match the expectations of the people. I can assure you that funds are no constraints for these efforts.

RAY is nothing short of a Mission for urban reconstruction. It is ambitious, but achievable, with our joint efforts. I look forward to the deliberations of this conference with expectation, and am confident that we will arrive at definite plans of action for the State and the cities.”


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