Open Forum

New Delhi, 9 February 2022

Affordable Housing

OPTIMISM ON DECENT SHELTER

By Dhurjati Mukherjee

The recent thrust to affordable housing in the Union Budget 2022 is a welcome move for the real estate sector and developers engaged in this area. More so, as the sector is seeking to recover from the pandemic and the government’s realisation for need to provide proper shelter to a major section of the population, would aid in this direction.

Those living in metros and cities and even in sub-divisional towns need proper and affordable shelter with basic facilities like sanitation and water, which are virtually non-existent to the poor and the economically weaker sections in most parts of the country.

Way back in 2015, the ambitious ‘Pradhan Mantri Awas Yojana-Urban’ was launched and PMAY-Gramin in 2016 to address housing shortages among the EWS, LIG and also MIG category people. It envisioned a pucca(concrete) house to eligible urban and rural households by 2022 with all basic amenities like tap water, sanitation and electricity to all rural households. As per available data from the Ministry of Urban Development till January 3 this year, 91.47 lakh houses were grounded for construction and 53.42 lakh were completed or delivered. 

In this Budget, the Finance Minister stated that 80 lakh houses will be completed for the identified eligible beneficiaries of PM Awas Yojana, both in urban and rural areas by 2023. A sum of Rs 48,000 crore has been allotted for this purpose. A single-window environmental approval will also help to grow affordable housing more in the times to come.The move is expected to provide a long felt boom to this sector and transform dilapidated cities into habitable centres.

Delving into the problem, this journey is representative of the thousands who are moving out of slums and slummish type settlements into proper shelters that are equipped with basic amenities. In fact, many State governments as also real estate players have latched on the opportunity of developing subsidised housing units, bringing them within the grasp of economically weaker sections and low income groups.

Even a few years back, there was not much activity in this sector due to high costs of construction and no incentive to go in for affordable housing. In 2018, the Union budget declared several schemes and incentives to promote this growth. These include new Credit Linked Subsidy Scheme (CLSS); grant of much needed infrastructure status to affordable housing, giving developers access to low cost funds; and revision of the qualifying criteria for affordable housing to 30 sq. m and 60 sq. m on carpet area, rather than the saleable area for metros and non-metros respectively.

All this and other such measures have witnessed a spurt in housing activity with a price tag around Rs 35-40 lakh and even less in metros and in Tier 2 and 3 cities. The CLSS, as a component of the Pradhan Mantri Awas Yojana PMAY, has had a transformative impact on the industry by scaling up the number of homes available for the common man. But obviously more incentives are needed to cover the country’s poor.

In this connection, a part of the recognised slums need to be transformed by providing good shelter with basic amenities to those residing there while making available 45 to 50 percent of the land for commercial purposes. In such types of projects, it would be better if the State governments or its housing development agency should take up such programmes to rehabilitate the poor and the EWS groups for better living.    

It also needs to be mentioned that shelter is a big problem for those living in coastal regions as there is constant threat of cyclones, not to speak of flooding. A related problem of our understanding of shelter is the lack of potable water, not just in rural areas but also in cities. As is well known, there is acute crisis of water in some regions while in many other locations, people consume highly polluted water and this is manifest from the increase in non-communicable diseases during the past three years. There is need to ensure supply of potable water and emphasise recycling and reuse of water for needs other than drinking purposes.  

Though the two years of the pandemic has had an effect on the housing sector with demand being low due to lack of resources among the target groups, it is hoped the situation would change in the coming months. The trend towards urbanisation has necessitated the need for affordable homes and builders are also interested to take advantage of this opportunity.

However, it needs to be pointed out that banks have a crucial role to play in this regard. Some experts have suggested that there should be variable rates of interest say for those whose yearly income is below Rs 5 lakh and taking loans of around Rs 15-Rs 20 lakh and those who are above this income and taking loans of above Rs 40 lakhs or even more.

A big challenge is the wide disparity in household income and increasing real estate prices in prime locations as a deterrent for buyers. Whether it would be possible for the government to subsidise land and some vital materials such as cement and stone chips to builders who are interested in constructing low-cost shelters or redeveloping slums and squatter settlements, should be seriously considered and an experts committee may be set up to examine this issue.

While the government has shown seriousness in tackling the shelter problem, it is vital it translates into concrete action. It is envisaged that between 2016 and 2022, the scheme is about to deliver 1.71 crore housing units. It has been extended up to 2024 with a target of 2.95 crore pucca houses in rural areas and around 1.40 crore houses in urban centres. Though the catchy slogan of 2015 of ‘Housing For All’ may take some time to be accomplished, the government’s positive attitude in this sector is quite evident.

Finally, achieving the target has to be accomplished this year for which serious efforts and a well-coordinated action plan need to be formulated. While the State governments have a crucial role to play, the panchayats and civil society organisations too need to be involved in the construction work for the shelterless beneficiaries. The government may also urge the private sector to set up more dwelling units near the areas of their project sites as part of their corporate social responsibility (CSR). Only then can decent shelter be given to the bottom sections of population so they have a decent roof over their heads. ---INFA

(Copyright, India News & Feature Alliance)

New Delhi

7 February 2022