Housing for masses is the need of the hour in India, as the economy is gradually transforming from an agrarian one to an urban one. At present, nearly 28% of India’s population lives in urban areas. Estimates reveal that the country’s population is likely to reach 1.35 billion by 2021, with 40% Indians living in urban areas. However, a number of challenges such as lack of government impetus, escalating land prices and private sector lethargy are aggravating the demand-supply gap of affordable housing.
India currently has more than 24.71 million housing shortage, with a major portion of shortage being in the EWS or LIG segment. To seek public opinion on the bottlenecks for affordable housing, ConstructionBiz360 recently conducted a poll, where 100% respondents blamed government attitude for rising demand-supply gap in affordable housing segment.
Commenting on this, industry expert G P Savlani said, “The government has formulated policies and plans such as JNNURM, Rajiv Awas Yojana and Interest Subsidy scheme for Housing for the Urban Poor (ISHUP) to attract private developers in providing affordable shelter to India’s teeming masses. However, the policies do not offer a mechanism that encourages developers to meet this challenge head-on.”
Rising land cost and availability of the same in cities, delay in approval procedures, increasing cost of input materials, high cost of associated services and amenities such as water and transport and lack of financial support to developers and buyers are some of the impediments that hold developers back from participating in the affordable housing market with full commitment, points out Mr Savlani. The government must address these problems and create a win-win situation for the growth of affordable housing in India, he added.
The demand for affordable housing in India is expected to grow at a CAGR of around 13% during 2011-2013.
Maharashtra shows the way
Realising the need to minimise the mammoth demand-supply gap in affordable housing, Maharashtra government has recently decided to enhance the stock of mass housing in the state, which includes cities like Mumbai, Thane and Pune.
On the sidelines of an event, state chief minister Prithviraj Chavan said that Maharashtra has made it mandatory for developers, with a layout of 2,000 square metres, to keep aside 20% land for affordable housing. Mr Chavan was speaking at the recently-held Progressive Maharashtra Conference, which was organised by the Federation of Indian Chambers of Commerce and Industry (FICCI).