Two and a half months ago, in a surprise appointment, a former Indian Foreign Service officer was made Minister of State (Independent Charge) of Housing and Urban Affairs. Hardeep Singh Puri, who served as India’s Permanent Representative to the United Nations from 2009 to 2013, has a multitude of projects to deliver on, including the Prime Minister’s ambitious Smart Cities Mission, Housing for All, and Swachh Bharat Mission. Excerpts from an interview on the challenges ahead
There are many concerns regarding the Smart Cities Mission, one of the flagship schemes of the Narendra Modi government. Around 80% of the funds are spent on just 2.7% of the area in each city. How does this make cities ‘smart’?
In an ideal world, where resources are unlimited, you could perhaps devise a scheme to ‘smartify’ the entire area. Clearly it’s not an ideal world. You have limited resources and you have to make a beginning somewhere. The present project, as I understand it, is the start of a process. It is not exclusive and it most certainly doesn’t mean neglecting other areas. There are other schemes like AMRUT (Atal Mission for Rejuvenation and Urban Transformation) which look at providing basic infrastructure. I don’t think there were any claims by the Smart Cities Mission to cover the entire city. I suggest you allow these schemes to unfold.
Do you envisage a greater role for private players in providing urban services, especially in the Smart Cities project?
In an ideal scenario, you should have the state and private sector in a happy blend. For much of the infrastructure like urban transport, especially metro projects which are capital-intensive, you need the state to step in. Personally, I have no doubt that unless you do the pricing right, world-class facilities will not be available. Safe transport, for example, cannot be subsidised by the state. It is just not sustainable. For example, I was travelling from Gwalior to Delhi and a four hour-long journey took eight hours for a variety of reasons. The price of the ticket was ₹900, obviously heavily subsidised. For comparison, in China which has a more efficient system, a ticket would cost ₹4,000.
Do you agree that most of our cities are held to ransom by real estate speculators?
For 70 years, we didn’t have a regulator. The history of Indian real estate will be studied in two parts: pre- and post-Real Estate (Regulation & Development) Act, 2016 (RERA). Real estate was the epicentre of black money. If you had black money and you did not feel like keeping it at home in gunny bags or under your mattress, you gave it to a builder, who would book a flat for you in his next project. RERA, demonestisation and GST are instruments to clean this up. How many quarters will it take to clean up? I frankly don’t know. But two things will definitely happen — the speculative bubble that was going on due to black money shall be broken. And land prices will get more realistically aligned.
Has implantation of RERA gone the way you expected, especially the way States have adopted the Act?
By itself there is nothing wrong in RERA. As per the Act, if you are taking money for a project, you are supposed to keep 70% of it in an escrow account. This clause is to ensure that builders don’t divert money meant for ‘X’ project to any other project. You can’t go wrong with this. In the process of adopting RERA, some State governments tweaked the provisions for ongoing projects. They diluted the Act and that was wrong. There are good builders and bad builders. Recently I was in Mumbai and a set of builders told me that they are unhappy that RERA was challenged in court. The case has been going on in the Mumbai High Court for the last fortnight and we will get a judgment any time soon. But importantly, by the tenor of the interaction, I think it must be clear to the buyers where my Ministry’s sympathy lies. We are not against builders, but at the same time we can’t be mute spectators.