Housing For All
By Dhurjati Mukherjee
A big question mark hangs over Modi government’s ambitious target of achieving ‘Housing For All by 2022-Rural’, given that surveys now recommend an additional 3.54 crore prospective beneficiaries over the originally estimated 2.95 crore. Thus leading social activists to suggest that housing schemes in real terms cannot have any fixed terms or cut-off dates since the demand keeps increasing perennially as old families get divided and new emerge.
In this section of the Pradhan Mantri Awas Yojana the primary objective was of providing pucca (concrete) houses to 2.95 crore rural households by 2022. It identified the beneficiaries from the Socio-Economic Caste Census, conducted by the Union Rural Development Ministry in collaboration with the States in 2011-12. Then the survey had found 2.95 crore rural households that had kutcha houses (made of bamboo, wood, mud, straw etc.), ramshackle houses or none at all.
A performance review meeting held last month found that out of the target of building one crore houses under the scheme by March 2019, a little over 80 lakh have been built. As on June 3, some 3.48 lakh of the 1 crore target houses were yet to be sanctioned by the State governments. As for the next phase of building 1.95 crore houses remaining from the original list, some States stated at the meeting that they had already given houses under their own schemes to 38 lakh families. So, the Yojana needed to build only 1.57 crore houses in the second phase but this is unlikely to be achieved in the next two to three years.
This apart, the PMAY-Urban aimed for one, Slum rehabilitation of slum dwellers with participation of private developers using land as a resource; two, promotion of affordable housing for weaker section through credit linked subsidy; three, affordable housing in partnership with Public & Private sectors and four, subsidy for beneficiary-led individual house construction or enhancement.
It also prescribed certain mandatory reforms for easing up the urban land market for housing, to make adequate urban land available for affordable housing. However, a Reserve Bank of India survey revealed that housing as a whole has become less affordable over the past four years. This indicates that developers are holding on to prices.
According to the report, Mumbai remains the least affordable city in India, whereas Bhubaneswar has the cheapest real estate among 13 cities that were studied by the RBI. The study measured affordability by comparing the price to monthly income of average home loan borrowers. The household price to income ratio increased from 56.1 in March 2015 to 61.5 in March 2019 for all cities. Another measure used is the loan to income ratio which has increased from 3 March 2015 to 3.4 in March 2019.
Home buyers in Mumbai now pay 43.3 per cent of their income as against 42.6 per cent of their income in March 2015. In Chennai, it has gone up from 36.7 per cent to 38.4 per cent while in Delhi borrowers, who used to pay 35.1 per cent of their salaries, now have to set aside 26.9 per cent. However, the RBI study is in sharp contrast to the experience of HDFC which stated, in a recent presentation to investors, that all affordability, measured as ratio of property prices to annual income had reduced from 4.4 in 2015 to 3.9 in 2019. This means that borrowers were able to buy a house with 3.9 years of salary as against 4.4 years in 2015.
This has possibly been the reason why housing sales in eight major cities increased marginally by 4 per cent to 1.29 lakh units during the first half of this calendar year, largely driven by rise in demand for affordable homes, according to property consultant, Knight Frank. The supply of new homes rose by 21 per cent to 1.11 lakh units during January-June 2019 from 1.24 lakh units in the year ago period. These findings are from report titled ‘Indian Real Estate’ that tracks demand, supply and prices of residential and office properties in eight metros.
While huge construction of flats in metros and big towns have gone up as also various types of facilities extended, there is possibly no dearth of housing for lower and middle income sections. But for the poor and the economically weaker sections, specially those residing in interior villages, the scenario is not quite encouraging. The efforts of the State government lack sincerity and urgency of purpose as a result funds from the Centre remain under-utilised. Lack of proper governance and prompt release of funds in some States are the major obstacles.
Another big problem is with regard to slums and squatter settlements in metros and big towns. India faced a shortage of 18.78 million fresh supply of houses in its urban pockets in 2012, the Technical Group on the Estimation of Housing, constituted by Union Ministry of Housing & Urban Poverty Alleviation revealed. The estimated slum population in India was 94.98 million. As against this, the number of dwelling units sanctioned under JNURM during a seven-year mission period was 1.6 million.
The report found that by 2031, about 600 million Indians will reside in urban areas, an increase of over 200 million in just 20 years and a major section would find place in slummish type settlements. This change in the socio-economic landscape will have a bearing on several things, housing being the foremost. With the real estate industry facing continued pressure in terms of raising funds for investment, the research report suggested that India must have a Real Estate Investment Trust (REIT) which, however, has not been formed.
Upgradation and renovation of slums is a key challenge for State governments, not just from the point of shelter needs of the poor but also the environmental aspect. Moreover, with adequate number of toilets and availability of potable water, this would be a major milestone towards affordable housing at low cost. In this connection, experts are of the opinion that governments can mandate minimum reservation of space for specific categories of consumers and, thereby, increase the stock of affordable housing.
At the same time, while housing for the poor and EWS must be thrust areas and that companies through CSR should be motivated to build tenements, there is need to consider giving industry status to housing. This, feel experts would give a boost to the sector and that the Government must take a decision if it seeks to see its housing for all mission turn into a reality.—INFA