This paper aims to develop a conceptual framework within which “housing and basic infrastructure services for all” can be delivered in urban India. Despite high and sustained GDP growth rates over the past two decades, the vast majority of Indians continue to live in substandard housing with few basic amenities or pay disproportionately high portions of their income for formal housing and services like water. The framework developed here stresses integration – an alignment of the economic, legal, planning, financial systems and a clear mapping of requirements – tenure mix, associated infrastructure in order to ensure targeted and productive investment. Above all it highlights that that housing cannot be thought of in isolation but must be provided along with infrastructure – physical and social. Against the elements highlighted in the framework, the paper evaluates the current issues and challenges in the Indian urban housing market and makes recommendations for tools and approaches that can guide movement towards a more holistic approach.

Economic growth and urbanization have become inextricably linked. With more than 51 percent of the world population now living in cities, the debate in recent years has been on whether to deplore urban living for mushrooming of slums where housing conditions are appalling, sanitation is almost non-existent, epidemic diseases can thrive, exploitation and physical dangers are widespread or to welcome for opportunities city life offers – jobs, health care, schools and opportunities for women (UNFPA, 2011). Adequate housing is necessary for social welfare as it provides protection from weather, a place to bring up families and a place to work. While policy debates have more or less accepted that urbanization is an irreversible phenomenon with more positive than negative externalities, the biggest challenge associated with urbanization is that it has not kept pace with the housing needs of those living in cities and those migrating to the cities. More than thirty percent of the world’s urban population are either living in poor housing conditions in slums or are homeless (UNHABITAT, 2010).

The situation is precarious when we look at the regional distribution. The percentage share of urban people who live in poor housing conditions in Sub-Saharan Africa is about 61 percent in 2010 followed by South Asia (35 percent) and South Eastern Asia (31 percent). In Eastern Asia 28 percent of the urban population lives in slums while in Latin America and the Caribbean the percentage is about 24 percent (UNHABITAT, 2010). The most disadvantaged are the low-income families, who due to lack of housing have been driven into an informal shelter in the burgeoning slums in many cities of all sizes. In many of Africa’s cities and towns, for example, less than ten percent of the population lives in formal sector housing (Struyk and Gidding, 2009).