Builders wary of reservation policy

PUNE: Maharashtra’s draft housing policy, which has attracted criticism from real estate developers because it focuses largely on Mumbai, has displeased them for another reason, too — reservation in housing.

The state government is contemplating enacting a legislation which will make it mandatory for all layouts to reserve 20% housing for the middle- and low-income groups. Should the developer set aside over 20% for these economic groups, he would be suitably incentivised, Swadhin Kshatriya, principal secretary, housing, government of Maharashtra, said.

“The national housing policy is not yet out, but the central government would like each state to reserve some housing for lower- and middle-income groups. The state government is thinking of enacting a legislation to this effect, and if the developer reserves a higher portion of housing in a layout, he will be incentivised through extra floor space index (FSI). Or the civic body could reduce property tax in a telescopic taxation where the tax will be low initially and higher later,” Mr Kshatriya said.

But according to a member of the Promoters and Builders Association of Poona (PBAP), the idea is unrealistic, not feasible and will lead to more corruption. “Reservation is not a solution for the economically weaker sections (EWS) and will only add to the chaos. Much more is needed, the government needs to create infrastructure to pave the way for large-scale housing, even with private participation.,” Lalit Kumar Jain, president, PBAB, said.

Mr Kshatriya’s presentation at a seminar here sparked off a debate. The official insisted that the government’s intention was to ensure social harmony through housing clusters, which include high-, middle- and low-income groups.

The draft policy is scheduled to come into force within a month, although it will take civic bodies in the state another year to change their existing rules and regulations in line with the policy. Thus, enforcement of the policy is about a year away.

Developers maintain that reservation would only lead to more corruption since “such policies come and go”. According to them what is needed is a “feasible and workable solution” to address this issue.

Maharashtra’s urban population is higher than the national average — 42% of the total, as against the national average of 27-28%. Mr Kshatriya said in the next few decades, over 50% of the state’s population could be living in urban areas, hence the need for low-cost mass housing.

“We expect all layouts to have a 30 sq metre dwelling for the low-income group and a 50-sq metre unit for the middle-income group,” Mr Kshatriya stated.