MHADA Should build 5 Lac Houses

If someone really wants to beat the recession and give a stimulus to the economy, it could be our very own government housing agency MHADA.

Recently MHADA announced sale of around 4000 houses and believe it or not more than 5,00,000 people applied to own a house at government advertised discounted rates.

It is common knowledge that MHADA builds very poor quality houses, nevertheless the response has been overwhelming.

If MHADA was to convert every application that it received in to a firm allotment, the economy of the country would receive a big boost.

Let us get the maths straight;

Flats on Offer : 3863

Average Sale Price : Between 20,00,000 to 30,00,000 (2 to 3 Million Rupees or 20 to 30 Lacs)

Taking a median price of 25,00,000 ( 2.5 Million or 25 Lacs)

Forms Sold : 5,00,000 (5 Million)

Money Collected from sale of Forms 5 Million x 100 (500 Million or 5 Crores)

If MHADA was to make a firm allotment to every person that has applied;

Total Sale Realization 5 Million x 2.5 Million = 1250000 Million Rupees ( 12.5 Billion Rupees or 1,25,000 Crores)

Considering a profit margin of just 20% for the government, it would translate to 25,000 Crores for the government.

All the babus can make their cut from the developers, the Babus get stimulated.

The politicians can fill their pockets by awarding contracts to their cronies, the politicians get stimulated.

Poor mumbaikar can have a house to call his own. They get stimulated.

The steel companies can churn more steel from their factories, the cement companies can spew more cement and thus everybody in the value chain gets stimulated!

Banks can lend money to these flat buyers because for one thing they are indirectly giving the money to the government, land title will be clear, flats will be built on time and chances of getting cheated are limited. Banks get stimulated!

Any takers for the scheme?