The government has found just about Rs. 4,000 crore for the purpose

The ruling Bharatiya Janata Party in Gujarat had promised in its 2012 election manifesto that it would build 50 lakh low-cost houses at a cost of Rs. 33,000 crore during the next five years, but the very first budget of the newly-elected Narendra Modi government has found just about Rs. 4,000 crore for the purpose.

By common arithmetic, at an average of Rs. 4,000 crore an annum, the estimated expenditure for the much-touted project has been slashed to Rs. 20,000 crore in five years — Rs. 13,000 crore less than the original cost.

“Though even Rs. 33,000 crore is less to build that kind of housing infrastructure, the allocation of Rs. 4,000 crore this financial year is peanuts,” points out Jayanti Dave, known Gujarat economist and veteran business journalist.

“If you take a modest average of Rs. 3 lakh per dwelling, the amount goes much beyond Rs. 33,000 crore for 50 lakh houses,” he adds. At Rs. 3 lakh per house, the cost comes to a whopping Rs. 1,50,000 crore for 50 lakh houses. It’s nothing but a pipedream that had been shown to the people, says Dave.

The Rs. 1,14,450 crore budget, presented here on Wednesday by Finance Minister Nitin Patel, has made an overall allocation of Rs. 9,391 crore for urban development and housing and Rs. 6,600 crore to make cities slum-free by upgrading kutcha houses.

He has found Rs. 7,316 crore for roads and buildings, Rs. 1,684 crore for ports and transportation, Rs. 8,396 crore for energy and petrochemicals departments, among others.

Among key tax proposals is a hike in electricity duty by 15 paise to 55 paise for high and low-tension consumers, which will generally borne by a limited number of industrial units.

The Finance Minister fully exempted micro-irrigation system equipment, some school stationery items, and agarbatti dust from five per cent to 15 per cent from value added tax (VAT). Those earning up to Rs. 6,000 per month have been exempted from paying professional tax.

Mr. Patel has proposed a five per cent hike in VAT on cigarettes up to 30 per cent and one per cent on second-hand vehicles.

The State’s annual development plan has been fixed at Rs. 58,500 crore, including Rs. 24,586 crore for social services.

In order to meet the situation arising out of deficient rainfall, the government has earmarked Rs. 10,000 crore for expansion of Narmada water supply in Saurashtra and other regions.


  • Expenditure for the much-touted project has been slashed to Rs. 20,000 crore in five years

  • An overall allocation of Rs. 9,391 crore for urban development and housing has been made


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