Affordable housing critical

Urban Regeneration

By Dhurjati Mukherjee

The urban sector in India requires a thorough transformation. A fact well known and accepted by planners, but the requisite facelift of urban centres, excluding metros, is hindered by lack of resources or severe crunch of funds. The scenario, however, is expected to change a little with the share of urban bodies in devolved funds rising from 0.78 per cent of the divisible revenue pool in the report of the 15th Finance Commission to 4.3 per cent. In fact, the Commission’s urban devolution is indeed substantial —Rs 121,000 crore over five years.
Significantly, the Finance Commission recommended earmarking Rs 8000 crore incentive grant for eight States for incubation of one new city each as a pilot project. As such, each new city will get Rs 1000 crore. The Ministry of Housing and Urban Affairs is to soon come out with the framework for this and it is expected to be taken up on a challenge mode. Obviously, the new city will be developed as a Smart City. The Commission has very aptly spoken of the need for both rejuvenation of old cities and the setting up of new ones. It said the challenge of setting up infrastructure in Greenfield cities can be less daunting than witnessed in old cities.
Though experts have pointed out that the sum allotted would not be sufficient to build a new smart city with all modern facilities, it is gratifying to note that a beginning has been made. The overcrowding of cities, the problems related to water, sanitation and hygiene are crucial issues that need to be tackled.
Another recommendation by the Commission is a mix of unconditional grants and those linked to national priorities such as drinking water, water harvesting and sanitation. For large cities, with over one million population, the Commission allots additional grants of Rs 38,196 crore through a ‘Million Pus Cities Challenge Fund’, linked to benchmarks for air quality and other such parameters.
It has suggested fixing price of water on a graded basis, wherein higher consumption entails higher charges and periodic revision of the charges has also been accepted. Importantly, it is at a time when the government is going to launch Rs 2.64 lakh crore scheme to provide universal household tap water connection to all homes across 4378 municipal areas by 2026.
If half of India is to become urban over the next couple of decades, that means adding 20-25 crore people to India’s cities. Obviously, the aim is not to allow them to crowd the existing cities, and therefore, new ones need to be built. These cities must be ‘smart’, in the real sense of the term, but the connectivity must also be low-cost so that people can commute easily.
Cities, as is generally agreed, are viewed as engines of growth. However, 30 per cent of the population is considered urban, as per the latest census, and the census definition of cities is probably flawed. India has villages of 10,000 people while other countries have towns with around 4000-5000 people. Using a broader definition of urban characteristics, the World Bank considered 55 per cent of the country’s population as urban. It is the small cities that are gradually getting overcrowded and needs special attention for upgrading basic facilities.
A section of experts feel that city development could improve if more powers are bestowed on mayors, as also heads of development authorities of large cities. They should be allowed to raise financial resources without being tools under the State government’s municipal affairs department. While this needs serious consideration it is seen that State governments are by and large in no mood to decentralise powers as mandated by the 73rd and 74th amendments to the Constitution.
One may mention here that urban living, having roots in the Scandinavian participatory design movements from 1970s, is a bottom-up approach to planning and implementation instead of the highly centralised top-down development planning, which we have now. In such an approach, residents, private actors, knowledge institutions and local governments interact with each other to design, test and fine-tune social and technical interventions in real time. This collaborative arrangement is highly significant and marks a shift from incumbent efforts based on government-industry partnerships.
Apart from this decentralised approach, the focal point of development of both old and emerging big cities is the need for low-cost housing for economically weaker sections (EWS) and the low income groups. The role of the State governments in this regard leaves much to be desired as these have not been playing an active role. Barring a few public projects, it is the private sector that is in the construction business, with an aim to make high profits. As such, these do not build cost-sufficient cost-effective flats for these two sections, whose requirement of low-cost housing is the critical.
At the same time, the Centre’s stated goal of ensuring housing for all by 2022 appears unlikely to be met given the slow pace of construction and delay in expanding the beneficiaries list. While launching the Pradhan Mantri Awas Yojana (PMJAY) – Gramin on April, 2016, Prime Minister Modi had gone by the Socio-Economic Caste Census of 2012 and set a target of building 2.95 crore houses by  2022. However, by 2019, State governments had identified another 3.67 crore households that lacked houses, raising the scheme’s possible target to 6.62 crore houses.
According to a report from the Parliamentary Standing Committee on Rural Development, the government built only 1.04 crore houses by the first week of June last year. The Rural Development Ministry informed the Committee that it has taken up the matter of additional beneficiaries with the Union Finance Ministry. The key reason for the delay is the lack of funds over the years and construction of number of houses remains as original target.
The need for affordable housing is one of the most important challenges for both the Centre and State governments, particularly in view of big towns facing massive in-migration from neighbouring areas, adding to congestion in these areas. Plus, what the private sector calls ‘affordable’ is ideally suited for the low income groups and not for the EWS. Taking into the target and demand, State governments must consider, if not done already, is construction on basis of public-private partnership and collaborate with the private sector accordingly. And while some States would have adopted this approach, the demand unfortunately is much more than the supply.
In the recently announced Budget, a section of experts and builders were of the opinion that in view of the 15th Finance Commission’s recommendations, more resources should have been allotted to the sector to give a boost to low-cost housing. Though the extension of additional deduction of interest for loan to purchase affordable house till March 2022 and affordable housing projects being able to avail tax holiday till that period, there are additional expectations among developers that the government will unlock surplus land for real estate projects. But whether it will be used for low-cost housing remains a big question. A regular update of targets achieved is necessary, as ‘housing for all’ is to met just a little over a year from now. — INFA