Rajiv Awas Yojana back on draft board, to get a facelift

The Centre’s ambitious scheme to provide housing to millions of India’s slum dwellers is back on the drawing board, one year after it was formally launched.

The Centre’s ambitious scheme to provide housing to millions of India’s slum dwellers is back on the drawing board, one year after it was formally launched.

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Reason: Rajiv Awas Yojana (RAY) has failed to take off, with states expressing reluctance to comply with mandatory provisions for availing central funds under the scheme such as according property rights to slum dwellers and earmarking 25% of the municipal budget for spending in colonies and slums where the urban poor live.

The lukewarm response from states has now forced the Housing and Urban Poverty Alleviation ministry, which is implementing RAY, to revisit the flagship scheme and alter some of the “mandatory provisions” to make it more acceptable to states. “We are in the process of redrafting RAY,” said a ministry official.

Under RAY, while the Centre gives 50% of the project cost to redevelop existing slums and create new affordable housing stock, the remaining 50% cost has to be borne by states, municipalities and the beneficiaries.

Sources said many states have also expressed inability to foot 50% of the bill and want the Centre to increase its share.

In the revised version, the ministry is considering doing away with the scheme’s main thrust of providing houses to slum dwellers. “Instead we want to shift RAY’s focus on developing infrastructure in existing slums. While the ministry would provide funds for improving basic amenities, slum dwellers would be given interest subsidy on loans to improve their homes,” said a source.

The ministry also plans to relax the existing clause for enacting property rights legislation by states within a year after the first project is sanctioned if they want central funds.