Procedural blocks hit beneficiaries of housing schemes

Prime Minister Narendra Modi’s vision of ‘Housing for All by 2022’ has a long way to go in Karnataka as the Affordable Housing in Partnership — Urban (AHP-U), a component under the Pradhan Mantri Awas Yojana — has turned out to be a procedural and legal quagmire.

As part of the AHP-U Credit Linked Subsidy Scheme (CLSS), the Centre aims to provide housing to Economically Weaker Sections (EWS), Low Income Groups (LIG) and Middle Income Groups (MIG) through public-partnership.

While the project cost ranges between Rs 5 lakh and Rs 15 lakh depending on the category of houses, the state government will provide a subsidy of up to Rs 2.7 lakh and the Centre will provide up to Rs 5 lakh. The beneficiary is expected to chip in Rs 50,000 to Rs 1 lakh, while banks will extend loans between Rs 50,000 and Rs 8 lakh.

According to government data that was discussed in the most recent State Level Bankers’ Committee (SLBC), of the 1.6 lakh applicants, about 1.01 lakh have received bank’s in-principle approval for housing loans. However, hardly 15,758 applications (for processing loans) have been submitted to the banks by the implementing agencies, including Rajiv Gandhi Housing Corporation Limited and the Karnataka State Slum Development Board.

One of the main reasons for the delay is lack of proper land documentation on part of the government. While the government has identified land to be allotted for construction of the houses, the flow of title and the title deed are not available in several instances.

“There were some hiccups in the government departments. In certain cases, beneficiary applications were ready, but complete land documents were not there,” SLBC convenor and Canara Bank General Manager B Chandrasekhara Rao explains.

Also, once the banks give the in-principle approval for loan, the corporations have to personally go to the beneficiaries, get the applications filled and submit the documents to the banks for further processing. The process is delayed here. “Banks are committed. If the documents are in place, the loans can be processed within a week or 10 days,” Rao says.

For the urban poor, the housing scheme has turned more of a bane than a boon. A Narasimhamurthy, Convener, Slum Janandolana, Karnataka, says the banks mandate a dozen documentation checks that most beneficiaries fail to meet.

“The most important thing here is that the government has not issued the sale deed to beneficiaries, without which banks will not sanction loans,” he pointed out.

Housing Minister V Somanna told DH that the government was in talks with banks to make things simpler. “The banks asked the government to give surety for loans, which isn’t practical. They have now agreed to consider the plot sanctioned to the beneficiary as surety. While the Covid-19 crisis has slowed things down, the government will resolve all the issues at the earliest,” he says.

The government’s approach to pass the burden on to the beneficiary is a part of the problem, says Amruthraj Isaac, convener, Slum Janara Sanghatane.

“The government wants the beneficiary to mortgage the allotted plot as security for the loan. We want the government to issue title deed and allow people to decide whether or not they want to take loans,” he says. He also alleged that officials coerce beneficiaries into taking loans just because the government wants to meet its targets.

Former Congress minister Eshwar Khandre says even though the loan is in the name of the beneficiaries, they do not have a say in it. “The process must be made transparent and the government must call the beneficiaries for a consultation with banks, explaining the loan process in detail,” he opined.