The Maharashtra Housing and Area Development Authority (MHADA) is responsible for creating affordable housing stock in the state, but has  faced challenges such as lack of land and rising input costs. The agency is now planning a radical move to raise income slabs that determine who is eligible to buy its homes.

MHADA Tries To Target More Buyers

Every year MHADA conducts a lottery and through that process it distributes houses across four income groups which are the Economically-Weaker Section (EWS), the Lower-Income Group (LIG), the Middle-Income Group (MIG) and the Higher-Income Group (HIG). This year MHADA is planning on revising the income slabs across all the four income groups in the Mumbai region.

The revised income slabs are planned to be capped at Rs 25,000 a month for the EWS group, Rs 25,001-Rs 50,000 for the LIG group, Rs 50,001-Rs 75,000 for the MIG group and above Rs 75,000 for the HIG group. The agency hopes that this will allow more people to buy its homes, while increasing its profits.

Is MHADA’s Move Anti-Poor?

Although this is the first revision in income slabs in the past 10 years, some experts worry that this will prevent the poor from buying MHADA homes.

“The only disadvantage of this is for the EWS groups, who may not be able to afford the new price bands.” warns Ashutosh Limaye, Head – Research & Real Estate Intelligence Service, JLL India.

MHADA has defended its plans, claiming that it is on the lines of Pradhan Mantri Awas Yojana (PMAY) and that the move will be inclusive.

“It is for the benefit of all citizens. In case there is a person, whose income slab has gone above Rs. 15,000 per month, going by the old norms he won’t be able to apply under the EWS category. But now he is covered under that category”, says SS Zende, Vice President & CEO, MHADA

Does MHADA Have An Alternative?

While raising income slabs might help MHADA to marginally increase its profitability, many experts feel that the agency has to do a lot more than just juggling numbers.

“MHADA has to build good quality homes. MHADA houses have been blamed so far for its bad quality. It should also streamline its system to ensure that only legitimate people get houses.” says Urban Planning expert Chandrashekhar Prabhu.

In a city like Mumbai where prices are sky rocketing, MHADA is the only hope for people who are in search of affordable homes. While it makes sense to increase income slabs, MHADA should also look at more options that will allow it to increase profitability and reach out to more customers, without sacrificing its core objective of providing affordable housing.
 

Reporter         : Ashwini Priolker, NDTV
Web Editor     : Nikhil Narayan Sivadas, NDTV