Availability of funds to decide announcement of next batch of smart cities, says Hardeep Puri

In an exclusive interaction, union minister for housing and urban affairs, Hardeep Singh Puri, told Moneycontrol's Vandana Ramnani that there can be a resolution to homebuyers’ problems ‘soon’ if they insulate themselves from people who are spoiling their cases.

On the completion of four years of Modi government, he has talked about the progress of various flagship missions such as RERA, smart cities mission and the PMAY. He talks about his ministry’s plans to hold three regional RERA meetings - one for the states in the West of India, one for the Southern states and one for the states in the East of India “to ensure that all implementation problems are addressed and hopefully resolved quickly”.

He also said that by the end of June, as many as 52 lakh houses would have been sanctioned under the PMAY scheme. On smart cities mission, Puri informs that as many as 14 integrated command and control centres are under construction and 32 are in the tendering stage. Edited excerpt:

By when do you think there will be a resolution to home buyers’ problems? Will we get a resolution before elections 2019?

Let’s get this home buyers issue in perspective. They have a genuine problem on that there is no doubt. Their issue needs a solution, again on that there is no doubt. My heart goes out to them. Again on that most people would agree that the home buyers have been duped. Many of them did not realise what they had got into. There is an expectation that somebody will step in and solve the problem. Let’s try and understand this problem. Many of these contracts, these are arrangements between two private parties – home buyers and the developers of promoters. Now in three cases, the issue is before the Supreme Court. And the issue has landed in the apex court precisely because the home buyers took it there. Now once the issue is before the Supreme Court, I make this submission to you that it is only the home buyers that can extract themselves from the courts. The home buyers would do themselves a great service to organise themselves and speak with one voice.

When they come and meet me personally and I have had about 30 meetings with homebuyers and this may come to you as a surprise because many of them have the meeting and we even agreed to a course of action but soon after that people interfere.

I had lunch with the UP industries minister Satish Mahana on Monday and I had the chief executive of the Noida Authority there. I make this submission before you that everyone who is anyone is committed to helping the home buyers but the home buyers also have to organize themselves and they must also lend a helping hand to themselves. Let me explain why I am saying this. If an issue has been taken by the home buyers to the court, clearly the court is giving pronouncements. It is very difficult for any agency to be dealing with this whilst the issue is sub judice.

Number two, at the end of the day, the court is providing some form of solution. Now when home buyers turn around and say that you must take some action, it is not clear to me as to what action is being recommended. One of the action recommended is lock up the promoter or the builder. In one particular case, the builder or the promoter has been locked up. Is that resolving the problem?

To my mind the jury is still out on that.

So my answer to you is that it is very difficult to fix a timeline. We could fix a timeline if the homebuyers organise themselves into one group and they conduct the exercise through negotiations. You are the ones who went and signed an agreement with the builders and the builder did not honour the agreement. Land is a state subject. It has to be solved by the authorities in the concerned states which in this case means the government of UP and the government of Haryana.

The Central Government wants to be part of the solution and that’s why I have been having these 30 meetings and I plan in the next few days to have more meetings. Because I have little respite hopefully from the problems of Delhi because we are getting the Master Plan amendments in place, I will be devoting more attention. Again as I said. I would like to see this done as early as possible but there are a number of factors. Substandard quality of buildings.

Again that is something on which punitive action needs to be taken. Many builders have defaulted. Yes somebody else has to step in. You can step in provided you know whom you are negotiating with. And in my discussions with the minister of UP we reiterated these points. We will also be taking concrete follow-up action in the days to come.

My answer to homebuyers’ problems is, it (solution) could be very soon if they also insulate themselves from the people who are spoiling their cases.

Coming to the amendments made to the Insolvency and bankruptcy Code last month, home buyers have now been made financial creditors. After the changes, do home buyers like bankers, have to take a haircut?

Let me tell you if a project goes wrong, you can have your own subjective view but the fact of the matter is that the asset value depreciates or the circumstances have changed. Many people say that either the bankers want to take a haircut or the home buyers do not want to take a haircut. Now if somebody suggests that they should be reasonable, well they immediately react with self-righteous indignation. Why should we take a haircut – ours is an honest … I agree with that but you must at the end of the day look at what is reasonable. If I am left to myself I will advocate that home buyers interests be safeguarded fully.

The easiest responsible position for me would be to say thank you very much, solve your problems yourself. You had signed this contract I have nothing to do with it and it has nothing to do with voting for the BJP or against. I am looking at this issue – we voted for the BJP and look what you have done - you signed this contract when there was Mayawati and Akhilesh Yadav there, so this kind of victimhood and populist politics is good but I think at the end the day the home buyers are being led down because unscrupulous builders and irresponsible promoters are actually planting people who are speaking as so called home buyers.

The genuine home buyers, I think, those who have invested their money, their hard earned income need help. When I say that homebuyers need to organise themselves, the idea is that the genuine home buyers will then be negotiating and the ones who are imposters or who are plants by the builders will fall by the wayside.

The RERA Central Advisory Committee meeting was held on May 14. Can you tell us what transpired at the meeting?

The Central Advisory Committee meeting of 14th May was a very useful exercise because RERA having completed one year we wanted to collect some of the RERA administrators, we wanted to look into the pending issues. The minutes will be in the public domain if they are not already released. I have already written to all the chief ministers, those that had to comply with the implementation of RERA, we are reminding them so that they are in a position to comply. I have some news that action like this is already being taken by many of them and we are not going to stop here. After the 14 May meeting, we are going to have three regional meetings - one for the states in the West of India, one for the Southern states and one for the states in the East of India. And all the implementation problems will be addressed and hopefully resolved very quickly.

I just ask you a question – were we better off without RERA? How can you have a sector which accounts for the second highest employment in the country without a regulator for 70 years. Clearly that in itself was a comment. So, my answer is RERA is very good. We lost some time because the very people whom it is aimed against, the unscrupulous builders, they challenged it legally, but we were able to overcome that challenge. And now we are in the implementation stage of RERA. I am absolutely hopeful that very soon, the compliance will be completed. There is already good news coming in. When I was in Mumbai, 27,000-30,000 projects were registered out of which 17,000 were in Maharastra. Clearly, it is catching on – some states have been somewhat slow in implementation but I think the meeting of the consultation committee, the letters that I am writing, and discussions like this one will help create the buzz and force the states to implement the provisions faster.

What do you have to say to West Bengal notifying its own Act at this juncture?

There was some development, that one year has passed and there was a notification. I need to see the text of the West Bengal (Act), the language of what they have put out. If this conforms to the language of RERA, that is one situation. If not, it is a different situation and we will have to deal with it. But I don’t want to comment on it till I have seen the text.

Coming to the affordable housing scheme, the PMAY scheme, till date 47.5 lakh houses have been approved under the scheme. How successful is the scheme?

I would not only call the scheme successful but a roaring success. The very fact that you are looking at a scheme that is to be completed by 2022. Out of that there are one crore houses to be built. By the end of June, I would have already sanctioned 52 lakh. The figure for the end of last month was 47.5 lakh but I think that the figures for this month, which are before the Central Committee, will take it to 52 lakh. We are receiving applications from potential beneficiaries at the rate of 300,000 to 500,000 a month. Now if you take a higher figure, which makes it 6 lakh in 12 months. So, 6 lakh plus 5.2, that is already more than the number what you need to build. If I take the lower figure, even then you are close to it. I think it is a roaring success.

I hope you saw the Pradhan Mantri Awas Yojana interaction that PM had with women in Chhindwara and other parts of the country? There is a paradigm shift there. I mean there are women who were toiling earlier, living in jhuggi-jhopadi tenements. For them to have a pucca house with a toilet, a kitchen – it’s a new paradigm shift. So, it is the most successful urban schemes to have been undertaken anywhere in the world.

Has the private sector been forthcoming with regard to affordable housing?

There are lot of private sector schemes which are available. And even in the Pradhan Mantri Awas Yojana, of the eight options that I had underlined, several of them involve private-public partnerships. So, this scheme is novel because land is to be provided. Land constitutes a major percentage of the tenement. Land is to be provided by the state. And then you are provided assistance under the four vectors, credit linked subsidy scheme, affordable housing, beneficiary led construction and in situ slum redevelopment. There are a lot of facilities. I think it is a win-win for the private sector. They should take a good look at it.

So, what has the response been so far?

The private sector is showing interest. But as I mentioned, there are different projects in different states etc but the private sector is also doing a lot of affordable housing on its own. But that does not cater to the economically weaker section and the lower income group. Now the middle income group that we have added, there the private sector has been active. I have always maintained that there is no shortage of land in the country. There is also no shortage of money. What there is a shortage of is bankable projects.

Coming to the smart cities mission. We recently had the first apex conference for CEOs of smart cities held in Bhopal. What were the main takeaways from the conference?

Well, the main takeaway is that the concept… people realise what a smart city means. We had in Bhopal the ninth integrated command and control centre which was inaugurated. We have 14 more under construction. And you have 32 at different tendering stages. Now if you have, let’s say, 32 plus 14 plus 9, so many command and control centres, that would effectively mean so many smart cities are operational. What this typically does is to put on one big board like the NASA big huge screen - 14 in this case urban services which you can then monitor – security, use of CCTV cameras, pollution, vehicular traffic, use of electricity, use of water, smart metering, basically all that you need to do to control, monitor and calibrate urban services.

I think the smart cities mission, is the fastest implemented projects of this kind anywhere in the world. You must remember we have been talking of 100 or 99 smart cities as of now but when you approve or confer this process and when you say this particular city will be a smart city, there are certain steps, sequential steps that you need to follow.

There is also some misunderstanding about the amount of money spent. Look most of us in government have got used the idea of utilization certificates. Utilisation certificate is something that the authorities issue one or two years after the job is done. I would rather you accept a different matrix. That you see how much are the projects actually completed. How much are the projects under tendering. And you will find that if you are having a project that is overall Rs 200,000 crore… if you have already done Rs 30,000 crore and if you have another Rs 14,000 to Rs 15,000 crore at different stages of tendering, it is very good progress.

I measure it in terms of functional integrated command and control centres. As I said, the ninth one was inaugurated in Bhopal. We will be doing the tenth one very soon. Fourteen more are under construction and 32 are in the tendering stage.

There is talk that the next batch of smart cities will also be launched

I would say why not and why not quickly. The issue is always of resources. We have something like 4,041 cities out of which 500 are AMRUT cities where you provide basic water facilities, tap and sewage connection. And on top of that, you have 99 smart cities. Why are we only confining it to only 99? Well, I would say many of these will have a light house effect. And I think when next time we have a resource easing… these were conceived in 2014, 2015 and then the process took place. I am an optimist and I am ambitious, I think every Indian city and every Indian village, ultimately should be a smart entity.

We made a start and by the time you have 2022, which is what the mission is, by 2022 you will have a 100 smart cities. When you are on your way to a new India of 2022, am sure there will be demand for many times that number to be smartified.

PM Narendra Modi has set March 2019 as the deadline for municipalities to go online to grant permissions for construction of buildings, etc. How many cities will actually meet this target?

All 500. In fact, we were hoping to do it even earlier. But you know there are some real implementation problems sometimes. But March 2019 (we will have) all 500. But the Niti Aayog is being even more ambitious. They want all Indian cities to be online.

Delhi land pooling policy has been delayed for many years. What is the update on that front?

We have already done all the work. Land pooling got mixed up with master Plan amendment. Now that the court has lifted its stay we are in the process of the 15- day consultation. That 15-day consultation period will be over on June 9. We will then listen to people, have meetings, people now have got time to submit their suggestions. So, my answer to land pooling is… very soon.