If the proposal gets a go-ahead, the economically weaker sections might have to shell out as much as Rs 20,000 to 40,000 extra to own a house in the city.

In a meeting called by the Housing and Urban Poverty Alleviation Minister Kumari Selja on Tuesday to take stock of the progress made by housing schemes across the country, state Finance Minister A K Walia asked for increasing the beneficiary contribution in the urban poor housing scheme, citing higher land prices.

“Land prices are quite high in Delhi, resulting in high prices of flats for the urban poor. The upper limit of Rs 60,000 as mandated by the Centre is insufficient. It should be left to the state to decide the beneficiary contribution under the scheme,” Walia said at the meeting.

With the intended beneficiaries of the scheme being the poorest of the poor, the Centre is reluctant to bring in an upward revision of the contribution. With the Lok Sabha elections drawing close, the Centre has asked the state to garner the balance amount by facilitating loans to beneficiaries.

Meanwhile, the Delhi government is caught in a precarious situation, with an estimated revenue loss of Rs 1,700 crore owing to a dip in stamp revenue and value added tax (VAT) collections.

A senior Delhi government official said that the state can not afford additional subsidy on housing for the urban poor. Under the Centre’s flagship Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the scheme for housing for the urban poor envisages a funding pattern whereby 50 per cent of the resources have to be pooled by the Centre and 25 per cent each by the state and the beneficiary.

“In Delhi, an upper limit of Rs 60,000 has been fixed as beneficiary contribution by the Centre. This works well when the cost per flat is Rs 1 lakh, but the cost of a flat in Delhi works out to be around Rs 3 to 4 lakh, putting an additional burden on the state government. The urban poor in Delhi can afford to pay more, therefore no unnecessary subsidy is required,” the official added.