After the urban renewal mission, the slum-free urban mission. The UPA government has a grand plan, to be announced in the February budget and launched in April, to rid 11 cities of slums in five years.

Certainly, it won’t be the Sanjay Gandhi formula, but a practicable version of Mumbai’s Dharavi renewal plan for Asia’s largest slum sprawl. As in Dharavi, corporate India will be involved in the grand plan that will offer a viable business proposition in the makeover of slum clusters and make them self-sustainable.

Lessons have been learnt from the Dharavi project, which has exactly been a success. So, the grand plan will skirt the pitfalls of Dharavi.

The 11 cities are Ahmedabad, Bangalore, Bhopal, Chandigarh, Delhi, Jaipur, Kolkata, Lucknow, Mumbai, Raipur and Hyderabad.

In the budget finance minister Pranab Mukherjee is likely to set aside Rs 5,000 crore as seed money to “catalyse this campaign”, said a ministry official. It will be the world’s largest slum clearance project.

Actual workable plans to clear slums will be put together by state governments and civic bodies concerned.

Mukherjee and Montek Singh Ahluwalia, planning commission deputy chairman are meeting in the next few days to discuss budget priorities. On Monday they will take them to prime minister Manmohan Singh.

Slum clearance is one of the priorities and will be billed as another UPA flagship programme, like the rural employment guarantee scheme, which did wonders to the coalition’s fortunes in the general elections last year.

“The plan will be market- financed and implemented by state governments,” said the official. But then initial money will be needed to find alternative homes for those displaced. This will come from the centre.

Land acquisition for alternative housing will be the states’ responsibility. The land will be handed over to private companies, including realtors, who will build homes to be hire-purchased by the displaced people.

A monthly rent will be paid to the housing developers at pre-determined rates for 15 years, after which the ownership of the houses will vest with the dwellers.

The developers will be allowed to recover part of their investments through commercial development of 20 per cent of the land.

Fiscal incentives are being weighed to make the plan attractive to all stakeholders. Also under consideration is an offer of viability gap funding of about a fifth of the investment.

Other features proposed are: Bank loans of up to Rs 5 lakh to slum dwellers to be regarded as priority sector lending, and a 5 per cent interest subsidy on such loans up to Rs 3 lakh, provided there is no repayment default.

Infrastructure and social amenities will be jointly provided by the centre and the states through their existing schemes or new ones they may devise.

Civic bodies will have to chip in. Also possible is routing part of central tax revenues to these civic bodies, as has been recommended by the 13th finance commission.