New
Delhi; (IANS) The government is considering creating a corpus fund of Rs.1,000
crore ($18.7 million) in the current fiscal that would encourage banks to give
housing loans in “significant volumes” to the urban poor, Prime Minister
Manmohan Singh said Tuesday.
Addressing
a conference on the Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
here, Manmohan Singh said the corpus of Rs.1,000 would be set aside to create a
credit risk guarantee fund that could be used to cover any bank losses.
“Developing
housing for the poor is critical for any strategy of sustainable urban
development. Availability of bank credit will be a key determinant of
successful implementation,” Manmohan Singh stressed.
“To
encourage banks to lend in significant volumes to the economically weaker
sections and low-income groups, we are considering the establishment of a
credit risk guarantee fund with a corpus of Rs.1,000 crore, to start with, in
the current year,” he said.
The
prime minister said the challenges in urban development were “truly enormous”
as he projected the Indian urban population to touch 600 million by 2031.
Currently
377 million Indians live in urban areas.
“Rapid
growth will bring a faster rate of urbanisation. That is almost a corollary. As
a result, our urban population is projected to increase to over 600 million by
2031,” he said.
Manmohan
Singh emphasised the “urgent need” to focus on metropolitan planning, improving
connectivity through better and larger networks of roads, expressways and
highways.
He
placed emphasis on better public transport in relation to affordable housing
for the economically weaker sections of society.
“City
planners must rethink traditional concepts of town planning. Master plans in
the past did not consider spatial requirements for living and working of the
poor. This must change, and change fast enough.”
He
mentioned the government’s Rajiv Awas Yojana (RAY) launched this year for
“creating inclusive and slum-free cities, while leveraging the value of land to
generate revenues”.
“The
aim is to achieve slum redevelopment and create affordable housing stock by
providing assistance to those states that are willing to assign property rights
to slum dwellers. This reform will give the urban poor a formal stake in the
cities’ economic and social development.”
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