India's new minister for Housing and Urban Affairs Hardeep Singh Puri is confident that we will see visible results of ‘Housing for All’ by 2019. The government has already approved 26 lakh affordable homes since 2015, he said in an exclusive interview to CNBC-TV18.
With regards affordable housing, he said some states are doing very well, while other states need encouragement.
Talking about to the low number seen in credit to the housing sector, which is around 10 percent down from 20 percent four years ago, he said there is need for banks to be more forthcoming towards needs of affordable housing sector. However, he assured the issue is being addressed.
With regards to Atal Mission for Rejuvenation and Urban Transformation (AMRUT) Scheme, he said 20 states are doing very well and the overall implementation of the scheme shows a cause for optimism.
Throwing more light on the Smart City initiative, he said one will see the physical manifestation of Smart City Investment by June 2018, with much of the investment coming through PPP Model.
Below is the transcript of the interview.
Q: How has it been, almost 50 days or a little more than that, has it been a rollercoaster ride or a soft landing?
A: Never a dull moment. It happened very quickly, it happened suddenly, I was deeply humbled to be included in the council of ministers. I was not surprised but I was in many respects humbled to have been inducted into the ministry and allocated housing and urban affairs which is a large portfolio. It is one which has the privilege of being the ministry where three of the Prime Ministers major flagships programmes are anchored – Swachh Bharat, Pradhan Mantri Awas Yojana, Housing for all and Smart Cities project. To be associated with the implementation of these programmes when they have not only acquired critical mass but are on the verge of physical manifestations of those schemes being visible, it is a great honour to be associated with that.
Having said that, I must say that it has been a sharp learning curve sort of a situation. I have no pretence that I know what I am doing, every day is a new learning experience and I am hoping that before too long I am able to contribute to finding the little solution here and there which will make the implementation even more effective. However a lot of work has been done and I am just privileged to have been brought in when the work is already done in some sense.
Q: You have kick-started your tenure making fortnightly appraisals and reviews mandatory, is that helping?
A: It has just started. We started with the first fortnightly review just a few days ago and that meeting is still not complete.
Let me share with you my personal objectives, we need to measure the progress, we need to be able to quantify with a certain degree of precision as to how those physical targets are being met. So, I did not want to start it within the first month because those would have been meetings which would not have been productive. I spent the first fortnight or so being briefed in a very intense manner by all the project directors and others associated with this. However I think the time has now come for me to be able to appreciate what physical work has been done, what remains to be done, so these are essentially quantification and measurement exercises.
First meeting will start now, we will be completing the first meeting tomorrow and then we will do this on a regular basis every fortnight.
Q: You said that you have come in at a time when most of these missions have achieved a critical mass. So, let us pick up affordable housing because housing contributes both to the social sector and GDP. The numbers latest we have is 26 lakh affordable homes have been sanctioned, what is working and what is not because we are still far away from the target?
A: Let me try and put the number in perspective. In the 10 years of the UPA government, a total of 13 lakh homes in affordable housing category which by definition means economically weaker section, the lower income group and in December last year the Prime Minister added the middle income group. So, in that section roughly 13 lakh homes were approved in the previous 10 years.
In the scheme which started in June 2015, we have approved or sanctioned 26 lakh homes. From my point of view if you have to make let us say 1 crore affordable houses during the life and tenure of the scheme, that is the target on which you have to work backwards. So, I started looking into it and I will give you few examples, I had the Andhra minister call on me the other day and I raised the quantum and pace of affordable housing and he gave me an interesting answer. He said we spent the first eight months evaluating different technologies, what would work, what would be cost effective, what is required in terms of other factors which you have to look at. He said we have approved a particular technology and he said I will give you 5.6 million houses in 15 months.
Now if you look at it statewise, if you look at how the other states are operating, clearly some states are doing very well and you see the results of that in terms of structures which have already come up or are in the process of being completed while other states need encouragement.
My own sense based on very preliminary reviews is that we will meet the target required and the target is not always critically defined because you have different sections etc. I am sure that by 2019 or maybe even before that we will have the results visible for all to see.
Q: Despite the push to affordable housing, mid-income group to credit subvention and loan rates falling, interest rates have fallen quite substantially, they are in the range of 8.5 percent, credit to the housing sector has actually touched an all-time low in July this year and that is beginning to worry everybody, 10 percent. If you look at four years ago, this number was 20 percent growth and that reflects also on what it could add up to the GDP number. How do you hope to revive the housing sector per se?
A: First of all, let me spend a minute or less on the importance of the affordable housing sector to the GDP figures and reviving the economy. I think this is a very important sector. It is a very large employer, but more than that, housing has an emotive appeal, as a son of refugees, people who were escaping the ravages of the partition and then came and sought shelter in refugee camp, I can tell you how important a small tenement is. The kind of projects that the Prime Minister has in mind makes it more so. You are looking at units between 30 square metres and 70 square metres where the title of the unit will vest in the lady of the house or co-jointly with the lady of the house. Each tenement will have a kitchen, it will have a toilet. It has a transformative effect.
But what are you looking at? You are looking at a situation in which government will provide the land, government will also provide a subsidy to begin with, Rs 1.5-2 lakh depending on the category and then the government will also help you get loans from the banks at favourable rates. Now, you are picking on one part. It is that the banks, I think you mean the public sector banks have not been forthcoming. I think there is a bit of a problem there and I think that is a problem my secretary has addressed with the banking secretary\'s issue which is coming up. We need to encourage the banking sector that in the case of arrangements for the affordable housing sector, they have to be more forthcoming.
But I think it is an issue being addressed. It may be part of a larger issue. There are NPAs, the sector needs cleaning up and you have not asked me the question but I do not want to miss the opportunity of saying what I have to say. After 70 years, the country has got a regulator in the real estate sector.
Q: I was going to come to that but there has been a disappointment with the regulatory because the stuck projects and home buyers who are seriously disappointed, sentiments not reviving because of that and most of the ongoing projects have found a way, or in the current regulations have found a way to stay away from RERA.
A: Can I just complete the picture. First, what did we have and what do we have now? You have got RERA in place. You have got a solvency, insolvency bill there. You have got industry status to infrastructure. Now, you have to comply with the existing law. Now what seems to have happened in this case is that when some states were complying with RERA, they tweaked the provisions of ongoing projects. Now that has led to problems but now we are seized of the problem, we are looking at what can be done in terms of RERA. The state governments are dealing with the issue. The courts are involved with the problem.
Q: Are state governments dealing with it?
A: I certainly see evidence of several of the state governments that we have dealt with. I have had my additional secretary write a letter to the principal secretary of a large state adjoining Delhi pointing out what we see as the problems. I have had my secretary dealing with the secretary in the Department of Corporate Affairs as long ago as September 25, I was barely few days old in the job.
You have got to look at the problem in its totality. It is not anyone's case that the problems of the home buyers should be given precedence over the banks because banks do not also use their money. The banks use the money of small time depositors. But, in any arrangement which is arrived at, surely the buyers also have to be safeguarded and that is what different agencies of the government are trying to do.
But let me come back to your original question. Will we be able to kickstart, revive and ensure that we get the housing for all scheme done by target date which is June 2020? I have absolutely no doubt. We will do it. Yes, sometimes the pace takes time. I gave you the example of one Urban Affairs Minister who told me they took a long time. I have had people come to see me. There are expressions of interest from foreign investors, there are domestic economic entities. People came and said I will deliver you one million houses. Now, you have got 25-26 lakh approved. I am only six weeks old into the job. If we had another conversation three months down the road, I may be able to give you more specific details, but I am optimistic.
Q: You also touched upon the insolvency code and there was a clear communication from your ministry and you saying that we have spoken to the Finance Ministry, to the Corporate Affairs Ministry as well to tweak the insolvency code to protect the home buyers' interests. If you look at the insolvency code and how it has evolved, there have been several tweaks and the government has been extremely proactive in making those changes because it is a new code and it needs to work, but in this case, it is taking time. Why?
A: First of all, I do not want to be negotiating with my senior colleague, the Finance Minister who also has additional charge of corporate affairs through a press interview. I would just leave the actual stage of discussion....
Q: But, you are hopeful that it will happen and it will happen soon?
A: 100 percent, but it has to be done in a pragmatic manner. Let me ask you a question. If you get into something, many of the tweets which border on anger or even hate mail that I get, are saying what are you doing, so and so is coming in a chopper and you are not doing, why do you not arrest him? First of all, I am not sure that even the home buyers want to give the powers to arrest to a Union Minister. You do not know how that power might end up being used. This is just a lighter way.
I think the issue is the government is seized of the matter at every level and what the ultimate test of this process is that the buyers, the home buyers and the affected sectors who are home buyers particularly the ones who are most adversely affected get relief as we go along. There is no instant magic, but we are at it and I can tell you, we will do the best we can.
Q: And you are also at the stage for plugging the loopholes in RERA. Is that a clear message to the buyers?
A: I think the problem has been caused by some states. When the provisions of the ongoing projects in RERA, when they adopted RERA, they changed it, they did it unilaterally. People have gone to court on that. Now I do not want to finger point. In the case of a large state adjoining Delhi, it was not done by the present dispensation, it was done by the political dispensation prior to the previous election. Now I cannot be held responsible for that kind of action, but what we can do, we want to be part of the solution. So we can encourage, but we can encourage within rule bound system where we use our margin of persuasion to encourage people, not by responding to demands of arrest and lockup and so on.