Maharashtra to create stressed fund for slum rehabilitation projects in Mumbai

To provide necessary financial assistance to developers for undertaking slum rehabilitation projects in the city, the Maharashtra government has decided to set up a special stressed fund where it will contribute nearly Rs 700-1,000 crore.

The decision comes at a time when the number of COVID-19 cases in the densely populated financial capital of the country has increased to more than 87,000, while the death toll has crossed the 5,000-mark.

"The recent COVID crisis has emphasised the importance of making Mumbai slum-free as the number of cases in slums have increased significantly.

"Therefore, it is necessary to rehabilitate the slum dwellers and to give them a better living environment," state Housing Minister Jitendra Awhad told reporters in a conference call.

He said since the pandemic has also impacted the ailing housing industry and the developer community, it was necessary to provide financial assistance to builders who are taking up slum rehabilitation projects.

"We have proposed to create a stressed fund for SRA (Slum Rehabilitation Authority) projects where we can help builders with finances through banks.

"We are in talks with State Bank of India and other banks to create the fund under Shivshahi Punarvasan Prakalp (SPP). The state would also contribute to the extent of Rs 700-1,000 crore in the fund," he said.

According to Awhad, the funds would be raised by SPPL, a fully-owned company of the Maharashtra government, through banks, but the fund will be controlled and distributed by the banks.

"I have already discussed this with Chief Minister Uddhav Thackeray who has given the consent for setting up the fund. We will now work on the details of the fund and maybe by next week, we will take it before the Cabinet for approval," Awhad added.

He further said over five lakh units are proposed to be developed under the SRA scheme, out of which only two lakh have been built so far.

According to Awhad, while 541 SRA projects are ready, around 370 are stuck.

Apart from this, SRA will take the responsibility of vacating the slums where the builders have received 70 per cent consent of the slum dwellers, which has been a major challenge for builders in any rehabilitation project, Awhad noted.

"We have also decided to relax various premiums related to slum redevelopment projects by way of reductions and deferred payments. Along with the premium relaxations, the approvals timeline has been drastically reduced at all stages by the Slum Rehabilitation Authority," he added.  The minister said the revised timeline of approvals at various stages, including letter of intent, would result in more than 50 per cent reduction in timeline compared to the previous structure followed by SRA.

The authority has also capped the rental amount during the rehabilitation phase to Rs 1.2 lakh and Rs 96,000 per annum in the city and suburbs zones, respectively.

As per prevailing policy, applications for intimation of approval (IOA) were accepted after issuance of letter of intent but now it will be approved simultaneously and completion certificate (CC) issued within seven days of the application.

Also, the approval of the file will be scrutinised at three levels only, compared to six previously.

"Earlier, the maintenance deposit of Rs 40,000 per tenant was payable to the extent of 50 per cent at CC stage and balance at rehab occupation certificate (OC) stage. This has been relaxed to be payable at OC stage of the rehab building," Awhad said.

Taking cognisance of stay orders on rehabilitation projects by various authorities, the minister said no authority except courts would be allowed to impose a stay on any ongoing SRA project.