Open Forum
New Delhi, 24 July 2019
Housing For All
OVERCOMING OBSTACLES VITAL
By Dhurjati Mukherjee
A big
question mark hangs over Modi government’s ambitious target of achieving ‘Housing
For All by 2022-Rural’, given that surveys now recommend an additional 3.54
crore prospective beneficiaries over the originally estimated 2.95 crore. Thus
leading social activists to suggest that housing schemes in real terms cannot
have any fixed terms or cut-off dates since the demand keeps increasing
perennially as old families get divided and new emerge.
In this
section of the Pradhan Mantri Awas Yojana the primary objective was of
providing pucca (concrete) houses to
2.95 crore rural households by 2022. It identified the beneficiaries from the
Socio-Economic Caste Census, conducted by the Union Rural Development Ministry
in collaboration with the States in 2011-12. Then the survey had found 2.95
crore rural households that had kutcha houses
(made of bamboo, wood, mud, straw etc.), ramshackle houses or none at all.
A
performance review meeting held last month found that out of the target of
building one crore houses under the scheme by March 2019, a little over 80 lakh
have been built. As on June 3, some 3.48 lakh of the 1 crore target houses were
yet to be sanctioned by the State governments. As for the next phase of
building 1.95 crore houses remaining from the original list, some States stated
at the meeting that they had already given houses under their own schemes to 38
lakh families. So, the Yojana needed to build only 1.57 crore houses in the
second phase but this is unlikely to be achieved in the next two to three
years.
This apart, the PMAY-Urban
aimed
for one, Slum rehabilitation of slum dwellers with participation of private
developers using land as a resource; two, promotion of affordable housing for
weaker section through credit linked subsidy; three, affordable housing in
partnership with Public & Private sectors and four, subsidy for
beneficiary-led individual house construction or enhancement.
It also prescribed certain mandatory reforms for easing
up the urban land market for housing, to make adequate urban land available for
affordable housing. However, a Reserve Bank of India survey revealed
that housing as a whole has become less affordable over the past four years.
This indicates that developers are holding on to prices.
According to the
report, Mumbai remains the least affordable city in India, whereas Bhubaneswar
has the cheapest real estate among 13 cities that were studied by the RBI. The
study measured affordability by comparing the price to monthly income of
average home loan borrowers. The household price to income ratio increased from
56.1 in March 2015 to 61.5 in March 2019 for all cities. Another measure used
is the loan to income ratio which has increased from 3 March 2015 to 3.4 in
March 2019.
Home
buyers in Mumbai now pay 43.3 per cent of their income as against 42.6 per cent
of their income in March 2015. In Chennai, it has gone up from 36.7 per cent to
38.4 per cent while in Delhi borrowers, who used to pay 35.1 per cent of their
salaries, now have to set aside 26.9 per cent. However, the RBI study is in
sharp contrast to the experience of HDFC which stated, in a recent presentation
to investors, that all affordability, measured as ratio of property prices to
annual income had reduced from 4.4 in 2015 to 3.9 in 2019. This means that
borrowers were able to buy a house with 3.9 years of salary as against 4.4
years in 2015.
This has
possibly been the reason why housing sales in eight major cities increased
marginally by 4 per cent to 1.29 lakh units during the first half of this
calendar year, largely driven by rise in demand for affordable homes, according
to property consultant, Knight Frank. The supply of new homes rose by 21 per
cent to 1.11 lakh units during January-June 2019 from 1.24 lakh units in the
year ago period. These findings are from report titled ‘Indian Real Estate’
that tracks demand, supply and prices of residential and office properties in
eight metros.
While
huge construction of flats in metros and big towns have gone up as also various
types of facilities extended, there is possibly no dearth of housing for lower
and middle income sections. But for the poor and the economically weaker
sections, specially those residing in interior villages, the scenario is not
quite encouraging. The efforts of the State government lack sincerity and
urgency of purpose as a result funds from the Centre remain under-utilised.
Lack of proper governance and prompt release of funds in some States are the
major obstacles.
Another
big problem is with regard to slums and squatter settlements in metros and big
towns. India faced a shortage of 18.78 million fresh supply
of houses in its urban pockets in 2012, the Technical Group on the Estimation
of Housing, constituted by Union Ministry of Housing & Urban Poverty
Alleviation revealed. The estimated slum population in India was 94.98 million.
As against this, the number of dwelling units sanctioned under JNURM during a
seven-year mission period was 1.6 million.
The report found that
by 2031, about 600 million Indians will reside in urban areas, an increase of
over 200 million in just 20 years and a major section would find place in
slummish type settlements. This change in the socio-economic landscape will
have a bearing on several things, housing being the foremost. With the real
estate industry facing continued pressure in terms of raising funds for
investment, the research report suggested that India must have a Real Estate
Investment Trust (REIT) which, however, has not been formed.
Upgradation and
renovation of slums is a key challenge for State governments, not just from the
point of shelter needs of the poor but also the environmental aspect. Moreover,
with adequate number of toilets and availability of potable water, this would
be a major milestone towards affordable housing at low cost. In this
connection, experts are of the opinion that governments can mandate minimum
reservation of space for specific categories of consumers and, thereby,
increase the stock of affordable housing.
At the same time,
while housing for the poor and EWS must be thrust areas and that companies
through CSR should be motivated to build tenements, there is need to consider
giving industry status to housing. This, feel experts would give a boost to the
sector and that the Government must take a decision if it seeks to see its
housing for all mission turn into a reality.---INFA
(Copyright, India News & Feature Alliance)
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