DDA eases EWS norms to hasten disposal of unsold inventory

Newly constructed low-income group (LIG) flats offered by the DDA in Narela in Delhi.

Newly constructed low-income group (LIG) flats offered by the DDA in Narela in Delhi. | Photo Credit: File photo: SUSHIL KUMAR VERMA

With relaxation in norms for allotment of flats under the Economically Weaker Section (EWS) scheme, the Delhi Development Authority is looking to hasten the disposal of its unsold housing inventory in the Janta category that has resulted in huge cash deficit 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 deficit of ₹9,615 crore.

The reply further highlighted the fact that the deficit was mainly due to unsold housing inventory worth “₹18,000 crore approximately”, and that it had started accumulating from the financial year 2016-17.

The factors responsible for the housing inventory remaining unsold included remote location of the flats in areas such as Narela, their small size, lack of metro rail connectivity and high cost.  

No takers

According to documents accessed by The Hindu, housing schemes launched by the DDA since 2014 have received a poor response from homebuyers, and a majority of the unsold flats are in the Narela area.

For instance, of the 17,922 flats offered in a housing scheme launched in 2019, as many as 15,902 flats remained unsold.

The relaxation in EWS house allotment scheme mainly involves doing away with the condition that the applicant’s annual individual income should be less than ₹3 lakh. Instead, the EWS flats will now be allotted on the basis of the family income being less than ₹10 lakh per annum.

According to DDA sources, the recent relaxation for EWS applicants is “a minor boost” to help dispose of the unsold housing inventory.

“In the case of Narela, the larger problems are that of connectivity, especially because the metro rail is something that will come up in the future. This relaxation in allotment of EWS houses will not translate into immediate disposal of the flats, and the DDA will have to do something about it since the cash deficit that arose out of the failure of the housing schemes will serve as a roadblock going ahead,” said the source.

In December last year, the DDA launched a special housing scheme with 18,335 flats for sale in areas such Jasola, Dwarka, Rohini, Vasant Kunj and Narela – which included 5,702 EWS/Janta flats and 11,452 flats in the Lower Income Group (LIG) category.

However, the response to the final draw, which was held in mid-April, remained poor with the DDA stating that only 9,790 flats were put up for sale in the final draw and only “5,227 flats were allotted to successful applicants”.

Of the total number of EWS flats, a majority of them (5,033) were located in Narela’s Sector A-1 to A-4, while a big chunk of the LIG flats (8,295) were located in Narela’s Sector G-2, G-7 and G-8.

The results of the final draw witnessed few takers with only 687 applicants for LIG flats in Sector G-7 and 2,234 applicants in Sector A-1 to A-4 against the offer of 6,546 and 5,033 flats respectively, which has resulted in another poor response to the urban’s body’s scheme.

L-G blames ‘mismanagement’

In early July, Lieutenant-Governor V. K. Saxena – who is also 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 “mismanagement”.

However, senior DDA officials have denied that there was any mismanagement while adding that liabilities have arisen due to the poor response from homebuyers to the urban body’s schemes, leaving it with an unsold housing inventory of close to 15,000 flats.

“We are not worried about the Higher Income Group (HIG) and Middle-Income Group (MIG) flats that are located in Vasant Kunj and Dwarka, these houses will find takers and the inventory is small in number. However, the EWS and LIG flats take up most of the inventory and have to be effectively disposed of,” said another source.

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Printable version | Sep 5, 2022 2:32:43 pm |