Affordable Housing

India: Significant Progress Made by Government in Affordable Housing

Over the past few decades, India has been witnessing increasing urbanization and inward migration to cities, which has resulted in a significant change in the demographic profile of its urban centres. Consequently, housing demand has been concentrated primarily in the affordable segment, with ticket sizes of around Rs. 35-70 lakh being considered a sweet spot. Developments in the affordable housing space, on the other hand, have been few due to limited availability of low-cost land, increasing construction costs, and low margin levels. Thus, a considerable demand-supply mismatch has been created in India’s cities. In rural centers as well, the housing quality has been very poor, with the vast majority of the rural population living in kutcha1 houses. In recognition of these issues, the Government of India has undertaken several initiatives to promote the development of good quality affordable housing, with the stated goal of providing Housing for All by 2022. The Indian real estate sector is of strategic economic importance to the Indian economy, as it is the second largest employment generator after agriculture and contributes about six per cent to India’s GDP.

Due to large scale migration after Independence, Government of India (GOI) faced a huge housing challenge, especially in urban areas. So, as an instrument of poverty alleviation, they took the responsibility for provision of housing resulting in various schemes for different sections of the society in its early years.

• Housing policies of the GOI have come a long way since the 1950s. While at the start of ‘planned development’, the policies were more welfare centric, later, these came to be driven by a well-defined constellation of economic interests. The first National Housing Policy was formulated in 1988. It was followed by the formulations of National Housing Policy in 1994, National Housing and Habitat Policy (NHHP) in 1998 and follow-up of 74th Constitution Amendment of 1992.
• Involvement of multiple stakeholders, repeal of the Urban Land Ceiling Act and permitting foreign direct investment in housing and real estate sector were some of the landmark initiatives introduced by the NHHP. These policy initiatives focused on transition of public sector role as ‘facilitator’, increased role of the private sector, decentralisation, development of fiscal incentives, accelerated flow of housing finance and promotion of environment-friendly, cost-effective technology.

National Urban Housing and Habitat Policy (NUHHP), 2007 identified ‘affordable housing for all’ as a key focus area to address concerns that could potentially impede sustainable urban development.

Jawaharlal Nehru National Urban Renewal Mission (JNNURM) 2005 was launched to implement reform-driven, planned development of cities in a mission mode with focus on upgradation of urban infrastructure, creation of housing stock and provision of basic services to the urban poor, community participation and accountability of Urban Local Bodies (ULBs). For the housing sector in particular, its main aim was the construction of 1.5 million houses for the urban poor during the mission period (2005–2012) in 65 mission cities [2]. Two of the sub-missions under JNNURM are dedicated to urban housing problems Basic Services for the Urban Poor (BSUP): Managed by the Ministry of Urban Development, the BSUP is designed for the upgrade and improvement of the conditions of slum settlements, ensure universal access to basic amenities such as water and sanitation and social infrastructure including health, education and social security.

Integrated Housing and Slum Development Programme (IHSDP): IHSDP seeks to tackle poor housing in urban. slum dwellers in cities and towns as per the 2001 Census, excluding those that were being targeted under BSUP.

Rajiv Awas Yojana (RAY), 2011: With the motto, ‘slum[1]free India’, the scheme was launched as a CSS, to be implemented in mission mode during 2013-2022 for the slum dwellers and the urban poor. It encourages the states and union territories to tackle the problem of slums definitively. The scope of RAY envisages integrated development of all existing slums, notified or non-notified, with development, improvement and maintenance of basic services to the urban poor, including water supply, sewerage, drainage, solid waste management, approach and internal roads, street lighting, community facilities such as community toilets and baths, informal sector markets and livelihoods centres.

National Urban Housing Mission (NUHM), 2015 was launched as a CSS and seeks to meet the gap in urban housing units by 2022 through increased private sector participation and active involvement of the states. It has four broad components or verticals out of which credit-linked subsidy would be implemented as a central sector scheme and not a CSS. The mission would initially cover 500 class I cities and will be spread across three phases (2015-2022).

Components of PMAY

PMAY aims at providing a pucca house, with basic amenities, to all houseless households and those households living in kutcha and dilapidated houses. The immediate objective is to cover one crore households living in kutcha/dilapidated houses in three years from 2016-17 to 2018-19. The assistance for the construction of toilets; piped drinking water, electricity connection, LPG gas connection etc. are also provided in convergence with other schemes.

The minimum size of the house is to be 25 sq. m. (raised from 20 sq. m) with a hygienic cooking space. A beneficiary family will comprise a husband, wife, unmarried sons and/or unmarried daughters. The beneficiary family should not own a pucca house either in his/her name or in the name of any member of his/her family in any part of India to be eligible to receive central assistance under the mission.

The houses constructed/ acquired with central assistance under the mission should be in the name of the female head of the household or in the joint name of the male head of the household and his wife. The houses under the mission should be designed and constructed to meet the requirements of structural safety against earthquakes, floods, cyclones, landslides etc. conforming to the National Building Code and other relevant Bureau of Indian Standards (BIS) codes.

All houses built or expanded under the mission should essentially have toilet facility. PMAY(U) Caters to the housing needs of the poor urban residents. Depending upon the annual household income, the urban beneficiaries are classified into three components, namely, EWS, LIG and middle-income group (MIG).

In addition, slum dwellers in the urban areas can also apply for the PMAY. PMAY-Rural (PMAY(R)) Helps the financially deprived families residing in rural India own a property. The houses in the rural areas will have all the necessary basic facilities, such as electricity, water supply, proper sewage system, and sanitation facilities.