Maharashtra government to help builders complete slum rehabilitation projects

In a bid to push slum rehabilitation schemes in the city, the state government plans to finance such projects. The only rider to this will be that the builder shall

In a bid to push slum rehabilitation schemes in the city, the state government plans to finance such projects. The only rider to this will be that the builder shall construct small and affordable flats as part of the sale component.

The government is also roping in State Bank of India (SBI) for the project by signing a Memorandum of Understanding (MoU) soon. (HT)

The government is also roping in State Bank of India (SBI) for the project by signing a Memorandum of Understanding (MoU) soon.

The state government, through the Shivshahi Punarvasan Prakalp Ltd (SPPL), will finance the construction of flats meant for rehabilitation of slum-dwellers as start-up capital , while the SBI will provide construction funds for the saleable flats at cheaper rates of interest.

The state government is likely to draw flak for financing builders at a time when it is shouldering a debt of more than Rs4 lakh crore.

This is not the first time that the state government has come up with such a scheme. In 1995-99, the then Shiv Sena-BJP government had launched a similar scheme for providing loans to the builders through SPPL. The scheme, however, got embroiled in a major controversy after it was found that the SPPL failed to recover crores from the builders.

“The government will not give direct loans to builders. These loans will be given through SBI,” Kumar said.

Officials said the SBI will disburse loans on behalf of the government, which will also be recovered by them. Officials from both the state government and SBI will scrutinise applications received, sources told HT.

The government is of the view that the new scheme would helpclear hundreds of the delayed SRA projects pending for years by making them financially viable.

It will also help the government to increase its stock of affordable houses and achieve the ‘housing-for-all’ mission, a pet project of PM Narendra Modi. The BJP led state government has set a target of constructing 19 lakh low-cost houses by 2022.

Lawyer Vinod Sampat however, criticised the move. “There are so many financial liabilities on the state exchequer. Instead of reducing them, the government is doing publicity stunts,” Sampat told HT.