DDA relaxes EWS standards to expedite disposal of unsold inventory

Its liabilities topped ₹10,000 crore due to poor response from homebuyers

Its liabilities topped ₹10,000 crore due to poor response from homebuyers

With the easing of standards for allocating apartments under the Economically Weaker Section (EWS) scheme, the Delhi Development Authority is seeking to expedite the disposal of its unsold housing stock under the Janta category, which has resulted in a huge cash shortfall over the years.

In a written response to a question from Aam Aadmi Party member Narain Dass Gupta, Union Minister of State for Housing and Urban Affairs Kaushal Kishore informed the Rajya Sabha that as of March 31, the DDA had a cash shortfall of ₹9,615 crore.

The response further highlighted the fact that the shortfall was mainly due to a stock of unsold homes worth “₹18,000 crore approximately”, and that it started to accumulate from the financial year 2016. -17.

Factors responsible for the stock of unsold homes included the remoteness of apartments in areas such as Narela, their small size, lack of rail connectivity and high cost.

No takers

According to documents seen by The Hinduhousing programs launched by the DDA since 2014 have had a poor reception from buyers, and the majority of unsold apartments are in the Narela area.

For example, of the 17,922 apartments offered in a housing program launched in 2019, no less than 15,902 apartments remained unsold.

The relaxation of the EWS house allocation scheme mainly involves removing the condition that the annual individual income of the applicant must be less than ₹3 lakh. Instead, EWS apartments will now be allocated on the basis of family income below ₹10 lakh per year.

According to DDA sources, the recent easing for SAP applicants is “a little nudge” to help eliminate the inventory of unsold homes.

“In the case of Narela, the most important issues are those of connectivity, especially because the metro is something that will come up in the future. This relaxation in the allocation of EWS houses will not result in an immediate disposal of the apartments, and the DDA will have to do something because the cash shortfall resulting from the failure of the housing programs will serve as a roadblock in the future” , says the source.

In December last year, the DDA launched a special housing program with 18,335 apartments for sale in areas such as Jasola, Dwarka, Rohini, Vasant Kunj and Narela – which included 5,702 EWS/Janta apartments and 11,452 apartments in the category of low income groups (LIG). .

However, response to the final draw, which took place in mid-April, remained poor, with the DDA stating that only 9,790 apartments were put up for sale in the final draw and that only “5,227 apartments were awarded to successful applicants.

Of the total number of EWS apartments, a majority of them (5,033) were located in the A-1 to A-4 areas of Narela, while a large portion of the LIG apartments (8,295) were located in sector G-2, G-7 and G-8.

The final draw results saw few takers with only 687 applicants for LIG apartments in the G-7 sector and 2,234 applicants in the A-1 to A-4 sectors against the offer of 6,546 and 5,033 apartments respectively, resulting in another wrong answer. to the scheme of the urban body.

LG blames ‘mismanagement’

In early July, Lieutenant Governor VK Saxena – who is also the chairman of the DDA – raised the issue of the urban body’s financial liabilities while stating that it had exceeded ₹10,000 crore” due to a “ mismanagement “.

However, senior DDA officials denied there was any mismanagement while adding that liabilities arose due to home buyers’ poor response to the city body’s programs, leaving it with an inventory of unsold housing of nearly 15,000 apartments.

“We are not worried about the upper income group (HIG) and middle income group (MIG) apartments which are located in Vasant Kunj and Dwarka, these houses will find takers and the inventory is low. However, EWS and LIG apartments take up most of the inventory and need to be disposed of effectively,” another source said.