The plan covers about 32 million people across 250 cities in the country. The highlight is that property rights would be conferred on the residents of the houses
New Delhi: In a move aimed at checking the proliferation of slums, the government today decided to launch an ambitious low-cost housing scheme that could benefit about 32 million slum dwellers in 250 cities, roping in state governments and private developers.
The highlight is property rights would be conferred on the residents of the houses that are constructed under this scheme, PTI reports.
The Cabinet Committee on Economic Affairs, chaired by prime minister Dr Manmohan Singh, approved the launch of the first phase of Rajiv Awas Yojana to facilitate affordable housing for slum dwellers, home minister P Chidambaram announced after the meeting. The aim of the scheme is to encourage low-cost housing, as well as re-develop the slums, he said.
The Centre would bear half the cost of slum redevelopment which could be used by the states and cities towards viability gap funding, in order to encourage private sector participation.
The government also decided to establish a mortgage risk guarantee fund to facilitate lending to the urban poor for housing purposes, with an initial corpus of Rs1,000 crore.
Central assistance would be conditional to reforms undertaken by states, including conferring property rights to the owners, Mr Chidambaram said.
"They (slum dwellers) will benefit by way of property rights and access to a decent shelter, basic amenities and a dignified life," the home minister said. He said the government believed that the initiative would also prevent mushrooming of slums.
Asked whether slums would be legalised, Mr Chidambaram said, "Yes, if property rights are conferred on a dweller. At the moment, they lead a very precarious existence."
If you think returns from bond funds will trump those from bank fixed deposits, you have...
In its silver jubilee year, the company is making another attempt to sell its failed model to customers
Sterling Holiday Resorts recently observed its 'silver jubilee celebration week' from 15th to 22nd May. Keeping up with this festive spirit, the timeshare company has announced a 'Vacations for Life' contest that will span over a month, till 30th June.
The celebratory mood notwithstanding, it looks unlikely that this 'opportunity of a lifetime' will see many takers as the company doesn't have such a sterling reputation.
According to a statement by the company, "In order to win the Vacation Ownership Plan, customers will be given an ID number at the time of booking their stay at Sterling Holidays. They can register their booking through www.sterlingholidays.com. After their stay, they will need to log on with their ID number and write a 250-word essay on their vacation experience at Sterling Holidays. The three best entries will win a Sterling Holidays Vacation Ownership Plan (SHVOP) worth Rs77,000, which will enable them to vacation annually for the next 25 years, by trading in 14 Vacation Ownership points each year."
It is not known whether the company has managed to pay off the massive debts it had incurred, which had caused much embarrassment and left investors in the lurch. Moneylife tried to contact the management through the company's public relations channel, but was informed that the spokesperson was unavailable and travelling abroad.
Sterling Holiday Resorts introduced the timeshare concept long before Anand Mahindra adopted this for Club Mahindra Holidays. About a decade after Sterling launched its operations in 1986, timeshare sales plummeted. Payments to creditors and investors were suspended. In 2003, Sterling's attempt to seal a deal with Day's Inn fell through, as the latter ran out of time to incorporate the deal.
From there, it was a steady decline. Sterling reported a loss of Rs135 crore soon after. By 2006, Sterling had run up a staggering debt of Rs211 crore. The company said it would require three years to clean up the debt and it set out to restructure its debts. Then again, Sterling was faced with another difficulty. Its attempt to raise $15 million by issuing foreign currency convertible bonds also failed.
In 2006-2007, Sterling's attempts to recover Rs100 crore via the sale of timeshare plans also bombed. In the beginning of 2007, the company decided to sell Rs50 crore worth of surplus assets to pay some of the debts. It also said that it would require another three years to clear its balance sheet. Once again, creditors and investors were left disappointed.
"It is difficult for a company to salvage its reputation if the debts are not paid off," an analyst said. "Launching a new project in such a situation will not boost customers' confidence."
The Sterling Holiday Resorts' stock has remained more or less flat over the last few months. On 16th February 2011, it was at Rs69.95, and today it closed at Rs69.80 on the Bombay Stock Exchange.
Given the company's record, it may not be an exaggeration to say that many would be sceptical about taking up the lifetime vacations opportunity. Investors are advised to be cautious.
(Read a previous Moneylife report on the issue: "Sterling Holiday attempts to resell failed timeshare plan all over again.")