In order to revive the stuck slum redevelopment schemes in Mumbai, the Maharashtra government has approved an amnesty scheme under which financial institutions that are registered with the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and the National Housing Bank (NHB) and have financed stuck schemes will be allowed to take over redevelopment of the stuck projects.
In Mumbai, over 500 slum redevelopment projects are stuck and the Maharashtra government has plans to revive these projects to ensure those displaced get a house, and the financial institutions that are making losses, can recover their money.
One of the conditions to this is that the developers taking over these projects should construct affordable homes in the sale component. The Slum Rehabilitation Authority (SRA) was set up by the Maharashtra government nearly three decades ago to make Mumbai slum-free.
The authority allows private developers to rehabilitate slum dwellers residing on particular plots. In return for rehabilitating the slum dwellers in an apartment, also known as rehab component, the developer is granted additional Floor Space Index (FSI) as incentive to commercially sell additional flats, also known as sale component, and make a profit. The term FSI refers to the ratio of the extent of construction permitted on a given plot area.
The Maharashtra government last week approved the amnesty scheme allowing financial institutions to take up the redevelopment of stuck projects. Other developers too, offering to construct affordable homes in the sale component, were called upon to take up these stuck projects.
Following this, the SRA issued a public notice on Thursday inviting interested financial institutions and developers to come forward and bid to take over the construction of the stuck projects under the amnesty scheme. The applications will have to be submitted with the SRA between June 07, 2022 and July 21, 2022.
The public notice issued by the SRA reads, “Several slum rehabilitation projects have been stalled in Mumbai and since several years there is no progress at all. The state government has (from) time to time taken various decisions and granted concessions in order to motivate the developers to take necessary steps for completion of such projects. However, demonetisation, COVID-19 pandemic and overall slowdown of the economy (are among) the major reasons for such delay in implementation of projects.”
The notice further reads, “Several financial institutions have granted finance to slum rehabilitation schemes, and in spite of finance, the concerned developers have failed to complete the rehab component in the schemes and also failed to pay transit rent to eligible slum dwellers. Considering the interest of slum dwellers at large as well as financial institutions having recognition/ approval of RBI, SEBI, NHB, (they) will be allowed to come forward for completion of schemes to which they have granted finance. The name of such financial institutions shall be entered in the Letter of Intent (LoI) of such a scheme as co-developer or lender.”
According to a list prepared by the SRA in April 2022, there are around 517 slum rehabilitation schemes in the city that are stuck and which require to be brought back on track to ensure that slum dwellers get their homes.
Meanwhile, Prakash Mishra, a Bandra resident in Mumbai whose slum rehabilitation took over 15 years, said, “My house was demolished in 2006 and paperwork for redevelopment started in 1997, but we got our house only in 2020. There were 577 slum dwellers to be rehabilitated in seven buildings of which only two are constructed. As of today, 419 slum dwellers are yet to get their houses and are also not getting rent from the developer since the last four to five years. We are lucky to get the house but even that is without an occupation certificate, no proper water connection, and lack of other clearances. We are constantly requesting authorities to make the yet-to-be-constructed five buildings eligible for amnesty schemes so others can get their house.”
