This is a decade when luxury items like LED TVs and smartphones are becoming affordable and housing is getting more and more expensive in India. Comment.
- Introduce with the housing scenario in India
- Mention the various reasons behind expensive housing and housing scarcity
- Bring out various government steps to improve housing
- Conclude appropriately
Housing in India varies significantly and can reflect the socio-economic mix of its vast population. The concept of affordable housing has become an illusion in India as the current housing deficit in India stands at 19 million units. 95% of this deficit is around the EWS and LIG segments.
Reasons for expensive housing:
- Absence of an effective policy framework for EWS and LIG housing, which is compounded with rising land cost, spiraling construction costs.
- Long gestation period accentuated by multiple approvals to be obtained from multiple authorities in a two to three year time period.
- Inadequate long-term funding across the project life cycle necessitating multiple rounds of funding for the same project increasing the cost of capital and time.
- Multiple fees and taxes are charged across project stages which inflates construction cost by 30 to 35 %.
- High urbanisation rate, coupled with high rate of migration from rural areas is stressing the limited urban infrastructure and has resulted in raising the cost per unit of built-up area.
- Lack of availability of land, primarily targeting of luxury, high-end and upper-mid housing segment owing to the higher returns etc. further complicates the issue.
Steps Taken by Government
- Housing for All by 2022
- Rajiv AwasYojanawith an aim to create Slum Free India
- Indira AwasYojana – Provides financial assistance to rural poor for constructing their houses themselves.
- Real Estate (Regulation and Development) Act, 2016 – To protect home-buyers as well as help boost investments in the real estate industry.
The government has acknowledged the importance of the housing issues in the country and the smart city programme is another attempt to improve the situation in urban areas. The solution, however, to the affordable housing crisis would be focussed efforts on land and housing policy reforms, delegation of power to urban local bodies, fostering innovative housing finance, and the reduction in project costs and schedule overruns.
Subjects : Yojna summary