Chapter # 9. Housing For All
- Provide every family with a pucca house, with a water connection, toilet facilities, and 24×7 electricity supply and access.
- Build 2.95 core housing units in rural areas and 1.2 crore housing units in urban areas.
The President’s clarion call to ensure the provision of houses to every family remains the key objective of the ‘Housing for All’ scheme. Following this announcement, the government has made it clear that one of its key priorities is to ensure safe and affordable housing for all. This mandate also includes upgradation of slums. Recent estimates of the Ministry of Rural Development and Ministry of Housing and Urban Affairs indicate a housing shortage of nearly 3 crore units in rural areas and 1.2 crore units in urban areas. Achieving the goal of ‘Housing for All’ will be a big step in the realization of New India Vision 2022 that will trigger economic growth and create millions of jobs for skilled as well as unskilled workers. Moreover, given the forward and backward linkages of the housing sector, the focus on affordable housing could bring rich dividends for other distressed sectors such as steel and cement.
Since 1985, the Government of India has been implementing a rural housing scheme for families living below the poverty line (BPL). A new scheme, the Pradhan Mantri Awas Yojana (Gramin – PMAY-G) was launched in 2016. This scheme now provides per unit assistance of INR 1,20,000/- in plain areas and INR 1,30,000/- in hilly states/ integrated action plan districts/difficult areas. This support is provided to homeless families or to those who live in kutcha houses as per the Socio-Economic Caste Census (SECC), 2011 data.
PMAY-G is converged with Swachh Bharat Mission (Gramin) and Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for the construction of sanitary toilets and also to provide the unskilled wage component.
Under PMAY-G, it was proposed to build one crore rural houses in three years between 2016-17 and 2018-19. The estimated financial requirement for the construction of one crore houses in these three years is INR 81,975 crore. During 2016-17, about 32.14 lakh houses were constructed. For the financial year 2017-18, the government set a target of completing 51 lakh houses; 51.38 lakh houses had been sanctioned and 44.54 lakh houses (i.e., 87.29 per cent of the target) had been completed by the end of March 2018.
Under the Pradhan Mantri Awas Yojana (Urban-PMAY-U), the mission aims to achieve the objective of ‘Housing for All’ by 2022 through its four pillars – a) in-situ slum redevelopment; b) affordable housing through a credit linked subsidy scheme; c) affordable housing in partnership between public and private agencies and d) subsidy for beneficiary-led individual house construction or enhancement.
For financial year 2017-18, the PMAY (Urban) targeted the sanctioning of 25 lakh houses and completing the construction of at least half the sanctioned strength. Against the mission target of 1.2 crore, 44.36 lakh houses have been sanctioned and 4.01 lakh houses had been completed by the end of March 2018.
The ‘Housing for All’ scheme faces the following key constraints:
- Lack of access to finance from formal financial institutions.
- Long-drawn out, multi-level approval system in urban areas in a large majority of municipal jurisdictions.
- For several categories of houses or those in particular locations, these delays are common even where a single window system has reportedly been introduced.
- Limited private sector participation in affordable housing schemes in urban areas.
- Predominance of conventional construction practices that result in delayed progress in urban areas and the limited use of pre-fabricated and pre-engineered materials.
- Limited access to suitable land banks for affordable housing projects.
- Continued rise in the number of slum dwellers.
- Insufficient number of trained masons despite the operation of the Construction Sector Skills Development Council since 2013.
- Capacity constraints in urban local bodies (ULBs) to formulate and design mass housing projects.
The strategies to overcome the constraints on affordable housing can be grouped into the following categories: 1) access to finance; 2)technology for construction; 3) reducing costs and 4) efficient use of land.
- Access to finance
- To ensure greater access for the poor to institutional finance, the Department of Financial Services should consider a sub-category under priority sector lending (PSL) for affordable houses. It should also consider relaxing eligibility conditions for bank loans such as raising the cap of INR 10 lakh on the cost of the house and raising the INR 2-lakh income threshold.
- The government should continue to raise funds commensurate with the ‘Housing for All’ targets. The Union Budget 2018-19 announced the setting up of an Affordable Housing Fund in the National Housing Bank (NHB). It would achieve greater synergies among agencies that are implementing government housing schemes. It would also enable the NHB to mobilize larger funds for housing projects. The Budget for 2018-19 has already announced increased allocations for PMAY (Gramin) to INR 33,000 crore and to INR 25,000 crore for PMAY (Urban) through internal and extra budgetary resources.
- Technology for construction
- Sixteen new emerging technologies have been identified, evaluated and promoted under PMAY(U). These fall under formwork systems (3), pecast sandwich panel systems (6), light gauge steel structural systems (2), steel structural systems (2) and precast concrete construction systems (3). These alternate and sustainable technologies offer safer and disaster resilient affordable housing. These will also improve the quality of construction in a cost effective and environment friendly manner across states/regions and achieve economies of scale in urban areas.
- A Global Housing Technology Challenge has been launched. It will bring internationally proven construction technologies for adoption in India, enabling us to learn from the best practices from similar economies around the world.
- The success of the East Kidwai Nagar redevelopment project in Delhi may be replicated wherever possible. The key feature is the replacement of old style public housing that suffered from grossly inefficient use of land with a modern, space optimising housing design.
- It is necessary to ensure convergence of provisions under the National Urban Livelihood Mission, Pradhan Mantri Kaushal Vikas Yojana, Construction Skill Development Council of India and MGNREGS (for rural areas) for large-scale training of masons to meet construction targets.
- There is need for a major push in the form of slum development programmes in urban areas.
A National Mission for Slum Rehabilitation will bring a greater focus on making the country slum free.
- Reducing costs
- Government projects should focus on the life cycle cost (LCC) approach to the construction of houses rather than the cost per square foot approach to ensure quality of construction and reduce expenditure incurred on the maintenance of houses.
- Fiscal support should be provided to companies that use recycled products made from waste. The use of such products should be standardized and adapted to shortlisted design types and pre-fabricated technologies.
- Regulatory complexities should be rationalized and a single window approval system adopted to reduce the time taken to construct houses in urban areas. The timeline for granting approvals should be specified and if approvals are not accorded within the stipulated time period, it should be treated as deemed approval.
- Financial engineering, like ‘rental-cum-ownership housing’ in which houses are initially offered on rent and ownership is transferred to the tenant once the cost of the unit is recovered, should be adopted.
- Efficient use of land
- The land lying idle with various sick/loss making public sector undertakings(PSUs) of the central/ state governments may be used to resolve the issue of land availability for affordable housing projects under ‘Housing for All’.
- The Department of Public Enterprises (DPE) should expedite release of land parcels available with central PSUs that have been identified for affordable housing projects.
- As suggested in the NITI Aayog’s Three-Year Action Agenda, Indian cities have focused on horizontal growth for far too long. It should now focus on vertical growth. The following measures can be taken to accelerate vertical growth:
- Launch a mass campaign to sensitize cities and states on the benefits of vertical growth.
- Provide capacity building to states and cities willing to undertake measures towards vertical growth.
- Provide considerable rewards to cities that relax their floor space index (FSI) norms. One of the key reasons behind India’s horizontal sprawl is stringent FSI norms. The discussion on changing FSI norms considering trunk infrastructure and other social issues needs to be expedited across India.
- Provide additional central government funding to cities that undertake FSI reforms under the Smart Cities Mission.
In addition to the measures outlined above, urban governance reforms, such as removing the need to obtain permission for non-agricultural use in the case of land that has been earmarked for residential purposes in master plans, amending rental laws and others, have the potential to alleviate the challenges to achieving the goal of ‘Housing for All’ by 2022-23.