By: Ravi Sinha
Track2Realty: Omkar Realtors & Developers, one of the leading players in making the slum redevelopment a success story in Mumbai believes slum projects are generally feasible in Metro Cities and more particularly in Mumbai. Shifting focus on Slum Rehabilitation for ECB will really help the sector.
Manoj Paliwal, CFO of Omkar Realtors & Developers says that since land parcels with large number of tenants are available in Mumbai, requirement of capital is also more.
“We are taking up the matter with concerned authorities. Slum redevelopment projects are state level issues, guidelines are meant for the entire country. Therefore, some delays are logical. But ECB in SRA would be a game changer for Mumbai redevelopment as a new window for financing will be available to the developers at reasonable rates,” says Paliwal.
The moot point is why is the move to slum ECB stuck up in policy logjam? Requesting anonymity a Housing Ministry official says Reserve Bank of India has already come out with the guidelines. You have to understand that Government of India and NHB are also working towards issuance of their part of the policy guidelines. I expect that soon these guidelines should be made available.”
Diipesh Bhagtani, Executive Director, Jaycee Homes says the Government has to be proactive with regards to ECB in SRA projects. The lack of a clearly defined policy is the main reason for this logjam. The eligibility levels and related fundamentals need to be established clearly for this policy to take off.
“ECB in SRA would eventually be a boon for the real estate market in Mumbai. The cost of funding through ECB would be cheaper than private funding through normal schemes. Additionally, ECB in SRA will help the poorer sections of the society to benefit as loans will be far more accessible and cheaper. ECB for SRA has the potential to lift the slum dwelling population from slums to live in respectable and affordable houses. Thus, ECB in SRA has the potential to make ‘housing for all’ a reality in a congested city like Mumbai and other metro cities. So, yes, it will definitely be a game changer for Mumbai redevelopment,” says Bhagtani.
It is true that ECB in affordable or low cost housing has not taken off in metropolitan cities of India. The high cost of land, raw materials, labour and inordinate delays in granting approvals act as a deterrent to affordable housing in cities like Mumbai and Delhi. Due to high cost factor, affordable housing as defined by the government is not possible in metro cities.
So, as an alternative, it is better to have developers to access funds from external sources and channel it towards slum rehabilitation projects. But there is a need for a clearly defined policy with regards to slum rehabilitation projects also. Though the Housing Ministry is preparing guidelines for slum rehabilitation projects that can raise funds via the ECB route, but the delay may defeat the purpose for which the proposed guidelines are being framed.
