The Delhi Development Authority (DDA) will sell around 5,000 flats in the Capital and has invited the applications for the same. DDA is expected to earn Rs 225 crore as interest on the money it will collect as refundable registration fee.

DDA has received more than 6 lakh applications each with an application fee of Rs 1.5 lakh. A combined sum of over Rs 9000 crore has been collected and this amount is expected to balloon by a substantial amount by September 16, which is the last date for submission of forms. The flat will be allotted by the DDA authority through a computerized draw in three months time. For these three months all the application money stays with DDA, on which it will at least earn an interest of Rs 4.5 lakh per flat.

The authority is likely to earn an interest rate of 10 percent on its collected sum and turn better-off by Rs 225 crore before refunding the amount to the unsuccessful candidates.

The seven banks- State Bank of India, Central Bank of India, Union Bank of India, IDBI Bank, ICICI Bank, HDFC Bank and Axis Bank-are acting as nodal agents for the scheme and collecting applications along with the refundable registration fee.

If an interest rate of 9 percent is provided instead of 10 percent, the DDA authority will still earn Rs 4 lakh per flat on the registration fees kept with the assigned banks.

DDA is planning to use these earnings to buy land for housing schemes that will focus on low income group. "That's the model we follow. The money from the registration fees will be used to buy land to build houses for low-income groups," said DDA spokesperson Nimo Dhar.

DDA authority has also priced the flats below the market price in order to reach out to the common man. This has attracted a large number of applications. These low prices indicate that DDA is chartered for other than profit-making activities. "We are a no-profit-no-loss organization," the spokesperson added.

The response to DDA's scheme has been remarkable, remarks Ramesh S Singh, additional general manager of Central Bank of India, one of the seven banks to who are acting as the agents for the housing scheme of the authority.

A similar scheme was launched by DDA in 2004 but this time the public is showing more interest in the scheme says, Singh. "Real estate prices are shooting up and many people find it beyond their means to buy residences built by private players. For this section, especially the middle class, DDA flats are the best option."

Presently, when RBI has been trying hard to curtail inflation in the economy by raising the CRR and repo rate, this scheme proves to be a blessing for the masses. There have been increased applicants as the premium flats have also become dearer.

The Delhi Development Authority was created in 1955 under the provisions of the Delhi Development Act "to promote and secure the development of Delhi".