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Fix MGNREGS first, ‘smart villages’ can wait

The Cabinet on Wednesday took two decisions that focus on rural India: First, it approved an additional 50 days of work for farmers/workers under the MGNREGS over and above the 100 days in areas where drought or natural calamities have been notified; and, second, it okayed a plan to develop a cluster of ‘smart villages’ to transform rural areas to economically, socially and physically sustainable spaces. The two decisions provide an interesting snapshot of the gap that exists between reality — rural distress is spreading at an alarming pace and hence the need to extend the scheme — and the ambition for a 360-degree transformation.


The MGNREGS decision is a well-meaning one and will enable states to ensure additional wage employment to the poor in drought-affected areas, help tackle rural seasonal unemployment and reduce distress. But this measure could end up being a cosmetic one unless the government fixes the existing problems of the scheme, the key being delayed payments, which have lead to a decline in people claiming employment under the plan. In the last fiscal, households that completed 100 days of wage employment — the minimum guaranteed under the scheme — declined by 50%. It was 2.444 million in 2014-15 against 5.173 million in 2013-14 . The average number of days of employment provided per household nationally in 2012-13 was 46.2, but this fell to 39.99 in 2014-15.

The delay in payments of wages has happened due to budgetary and payment delivery constraints. The budget for the scheme declined from Rs 40,100 crore in 2010-11 to Rs 33,000 crore in 2013-14 during the second term of the UPA. In 2014-15, the allocation by the NDA increased marginally to Rs 34,000 crore; this was further raised to Rs 34,699 crore in the current budget.

Earlier this year, a government review showed that only 28.22% of wages were paid within the stipulated 15 days till December, indicating that 72% of the payments were not handed out in time. These delays continue despite several steps taken including fixing responsibilities on officials creating roadblocks for payments. 

The tardy implementation of the plan forced the government recently to direct states to take steps to improve the implementation and outreach of the programme by running campaigns to popularise the scheme, complete the unfinished projects and ensure payments. While grand and expensive schemes like “smart villages” are attention-grabbers, what will finally make more political and economic sense is to run schemes like the MGNREGS, which has the capacity to transform the lives of the poorest of the poor in a major way, with much more thought and passion.

The author's views are personal.

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Realty Trends

Home prices near most-affordable levels in over 30 years: HDFC

Home prices may have been on an upward spiral for many years, but the cost of owning a house in India remains near the most affordable level in over three decades, shows data compiled by mortgage giant HDFC Ltd.

The average price of a home, purchased with a housing loan, rose to over Rs. 45 lakh in the 2012-13 fiscal year -- marking the fourth consecutive year of uptrend from about Rs. 25 lakh in the year 2008-09, HDFC has said in a presentation.

However, factors like an even greater surge in the personal income levels, tax incentives and lower interest rates, have resulted into houses becoming more affordable to purchase, it said.



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India Property Investment Gyan

Major schemes for affordable housing to be modified: Girija Vyas

NEW DELHI: Major schemes meant for providing affordable housing to urban poor will soon be modified to make them more people-friendly, the government said today and invited the private sector to contribute more actively in this area. 

Speaking to reporters here, Housing and Urban Poverty Alleviation (HUPA) ministerGirija Vyas today said her ministry is modifying all the major schemes including the Rajiv Awas Yojana (RAY), Rajiv Rinn Yojana and the, Affordable Housing in Partnership scheme and added enormous budgetary support has been earmarked during the current plan period. 

Secretary HUPA Arun Kumar Misra told reporters that a fund of Rs 35,000 crore had been allocated to the ministry for the implementation of three major schemes, including RAY, which was being run in as a pilot project earlier under 12th five- year plan. 

He said the ministry would require approval from the cabinet for the implementation of these schemes and efforts would be made that through these funds 2 million affordable houses are encouraged. 

He said that in addition to the central government funds, banks and credit institutions would be providing funds for construction of affordable houses. 

Vyas said that with urbanisation, the number of urban homeless and area under slums had grown. 

Vyas said there was a need for private developers to develop economic models to foster affordable housing for economically weaker sections and lower income group households in urban areas as government efforts in this direction needed to be supplemented. 

Vyas also said a technical group, set up by her ministry, had shown that out of 18.78 million housing shortage in the country, 96 percent shortage is in EWS and LIG category and for this huge investments and private sector participation were required. 

Misra said the group set up by the ministry has suggested incentives for the affordable housing sector included concessions to development-related charges and service taxexemptions. 

It also sought direct tax rebates for affordable housing projects and inclusion of the sector in the 'infrastructure facility' he said and added the task force had felt that governments need to still provide direct capital grant support to affordable housing projects. 

Misra said that in the symposium held today where states, experts and private sector representatives were present, there was unanimity on many of the suggestions.

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Green Property- Eco Homes

Reclaim your city space: Projects in Delhi, Mumbai and Kolkata aim to transform lives

Three projects in three cities aim to transform the lives of people who live close by. The one in Mumbai hopes to transform a congested area into a green precinct; the one in Delhi converted an open drain into a walkway, while Kolkata hopes to bring the crowds back...