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  • 29/11/2007

In West Bengal, joint-sector firms have been formed to provide low-cost housing for middle- and lowincome groups. The cross-subsidy model lets developers set prices for higher-income groups, while middleincome groups get houses at cost price and lower-income groups below that. A Mumbai-based group is investing about Rs 1,500 crore on a project in east Kolkata, which will have 20,000 units priced from Rs 3-6 lakh for lower- and middle-income groups. Kolkata's Shrachi Group is developing Greenwood Nook, also in the east. The 284-unit estate will accommodate all income groups. This has unlocked lots of land at subsidized rates, bypassing ceiling laws. That's not how developers see it. "The cross-subsidy model works if you go into it thinking you are going to do some pro bono work,' says Harshvardhan Neotia, head of the citybased Ambuja Realty group. "It gives you a profit, but if you had made only high-income units your margin would have been higher. No builder will create subsidized housing unless it is a requirement,' he admits. But V Ramaswamy, who's worked on slum development in Kolkata and Howrah for 20 years, says this is rhetoric. "They shouldn't talk of cross-subsidy because they are getting land for nearly free and making huge profits,' he says. "All government does is free prime land and hand it to builders.'

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