March 7, 2002
‘32’
E-LEARNING FOR MUNICIPAL FUNCTIONARIES TO BE LAUNCHED
The Minister for Urban Development and Poverty Alleviation, Shri Ananth Kumar said that e-learning project for promoting capacity building in the area of Urban Governance in Urban Local Bodies would be launched in 3658 Urban Local Bodies in the country. Addressing a Press Conference here today, Shri Kumar disclosed that the target audience would be around 73000 persons including municipal councillors and the officers of various municipal corporations, municipal councils and municipalities in order to fully achieve the objectives laid down in the decentralized urban governance within the ambit of 74th Constitutional Amendment.
"A proposal for the project has been received from the Institute of Housing Studies, Rotterdam to be implemented in conjunction with the Government, HUDCO and HSMI, National Institute of Urban Affairs, Institute of Housing Studies (India), University of Delaware and IT Preneurs which propose to form a consortium for promoting capacity building in the area of Urban Governance in Urban Local Bodies", the Minister added.
Shri Kumar further stated that a memorandum of understanding between the consortium partners is under formulation for the purpose. Education training materials including best practices would be made available to the participants. The most modern techniques of teaching through Internet and other e-learning methods will also be part of the capacity building programme, initially in the metropolitan cities and the million plus cities.
Shri Kumar pointed out that the Budget for the year 2002-03 has outlined a number of innovative initiatives to boost the Housing and Urban Infrastructure Sectors. The proposal in the budget for extending the tax exemption of interest repayment upto rupees 1.5 lakhs on housing loan to be available for houses completed even beyond the year 2003 subject to the condition that such houses are completed within three years of availing loan assistance would facilitate a larger output of housing delivery thereby increasing the availability of housing in the market. The proposals for a major reduction in custom duties on raw materials for steel production would definitely bring down the cost of steel facilitating larger construction activities as well as reducing construction costs. On the same lines, the reduction in custom duty for cement and clinker would promote a larger competition resulting in increased production as well as affordable prices.
The proposal for dropping the present requirement of approval from the Appropriate Authority (Income Tax Department) for transfer of property under Section XX C is a very welcome proposal. This was a major hindrance for property movement and with the present proposal, no permission is needed and there will be increased buoyancy in the property market between buyers and sellers. Further, any capital gain emanated from such transactions can also be immediately invested in the capital gains bonds under Section 54 EC, which is now extended to the Bonds issued by National Housing Bank in addition to the earlier institutions like NHAI, NABARD and REC. This itself would substantially help in increased transactions in the property market. Efforts are being made to see that the benefit is also extended to HUDCO for implementation of 2 Million Housing Programme, VAMBAY, natural calamity affected housing and infrastructure projects as well as basic amenities and facilities.
The budget proposals have been overall extremely satisfactory for the Housing and Urban Infrastructure Sectors and now with the incentives for various saving instruments/avenues being reduced, there is a possibility for the individuals to channelise their savings into housing investments which could possible give a thrust to housing and real estate.
The establishment of Mortgage Credit Guarantee Scheme would protect Housing Financing Institutions from major defaults.
The proposal in the Budget for an Urban Reform Incentive Fund with rupees 500 crores contribution is a welcome proposal which would cover issues relating to revision of rent control law, evolving appropriate building byelaws for building construction, adoption of appropriate user pay instruments for making projects and urban local bodies self sustaining, as well as for incentives for Public Private Partnerships in civic infrastructure.
The proposals for City Challenge Fund for making urban local bodies credit worthy as well as the proposals for pooled finance mechanism with the enhancement of municipal tax free bonds from earlier rupees 200 crores to rupees 500 crores are measures which would go a long way in bringing enormous self sustaining initiatives by the Urban Local Bodies. In addition, the proposal for an Infrastructure Equity Fund to be created with a contribution of rupees 1000 crores for larger encouragement to projects in which private financing would help support taking up of infrastructure projects in all sectors. Further, he also welcomed the proposals for private partnership in green field airport projects which is indeed already being participated by HUDCO in the airport projects in Cochin, Kozhikode, Bangalore and Hyderabad.
Shri Ananth Kumar stated that the authorized capital of HUDCO has recently been increased from rupees 1250 crores to rupees 2500 crores. The increased equity available with HUDCO will enable it to leverage 8 times more funds in the market in the shape of market borrowings and from other financial institutions and banks, public deposits etc. which will enable it to enhance considerably its level of funding operations for housing and urban infrastructure projects from the present level of loaning of approx. 5000 crores per annum. Since earlier the authorized capital was fully subscribed, enhancing the authorized capital will enable Government of India to infuse more equity into HUDCO. This will also enable HUDCO to fulfill its social mandate of constructing EWS/LIG housing where HUDCO lends at lower rate of interest as compared to the market prevailing rates and incurs a loss This additional infusion will also help to attain a capital adequacy ratio of 12 as per the requirements of National Housing Bank as against the existing capital adequacy ratio of 9.6 and will also help in HUDCO receiving a higher credit rating in order to mobilize market borrowings at competitive rates.
The Department of Public Enterprises has categorized the Public Sector Undertakings into four Schedules, namely Schedule A, B, C & D. The categorization/re-categorization is done on the basis of comparative analysis vis-à-vis other companies in the cognate group and those under the administrative control of the Ministry/Department concerned.
Accordingly, the Government has recently approved the upgradation of HUDCO from a Schedule ‘B’ to a Schedule ‘A’ Public Sector Enterprise under the administrative control of this Ministry. At present HUDCO’s operations include annual sanctions of loans amounting to approx. rupees 8000 crores for housing and infrastructure projects all over the country and the level of releases of the order of rupees 5000 crores annually for such projects. HUDCO is undertaking the programme of 2 million housing for EWS/LIG housing with an annual target of 10 lakh houses (6 lakhs in rural and 4 lakhs in urban). In the field of urban infrastructure HUDCO has emerged as the market leader in providing institutional finance support to urban infrastructure. In view of HUDCO’s performance in the housing and urban infrastructure sectors, the Government has upgraded it to Schedule ‘A’ status.