Housing for all by 2022 : Challenges facing us
The progress till now has been excrutiatingly slow and its progress will depend on ramping up existing urban infrastructure, fast tracking approval processes and targeting the actual beneficiary.
Shelter is the basic requirement for humans after food and clothing. After 70 years of Independence, India is still struggling with rising shelter problem without any concrete steps taken to tackle it. While successive governments in the past tried to address the issue of affordable housing and failed, the Modi government has set itself a steep target to achieve this goal by 2022. The intent is indeed commendable as it has triggered intense state involvement in urban housing, planning and infrastructure. This is extremely important since the problems are different for each state, so are the ways to tackle them.
To understand how difficult this is going to be, let us put things in perspective - out of its plan to provide 18 million urban and 30 million rural households under this Yojana by 2022, only about 2 million houses have been approved and roughly around a lakh have been built so far in the last one year.
The progress till now has been excrutiatingly slow and its progress will depend on ramping up existing urban infrastructure, fast tracking approval processes and targeting the actual beneficiary. This concept seems to be a lucid solution to the prevailing housing woes, but its execution is intricate owing to the lack of clear policy framework to meet this ambitious target, unavailability of urban land at reasonable prices, rising costs of construction, high fees and taxes, regulatory issues and unfavorable development norms.
Various factors impeding PMAY from reaching its full potential and hindering the achievement of its targets are enlisted below:
Deregulation- We need to remember that Deregulation will be the key to the success of various government initiatives in the future. A major impediment to real estate development in India remains the approval process. The government has rightfully laid great emphasis on improving India's ranking in the World Bank Global Ease of Doing Business Index and continuously monitors the same looking at improvements in ranking as a success. The same World Bank released an Ease of Obtaining Construction Permits Index. Here India ranks a shocking 185 out of 187 countries. We are in the same club as war torn countries where institutions have collapsed and offices which accord approval have been bombed to rubble.
Scarcity of land- Urban land mass is under severe constraint to meet the housing necessity of the country’s population which is expanding rapidly. This is amongst the foremost reasons for slow progress of this initiative. Land is a precious commodity and its unavailability in metropolitan cities in India has affected development of affordable housing in areas where it is actually required. The administration must address this issue if it intends to realize its dream of building millions of new homes by 2022.
Massive capital expenditure at every stage: A project of such magnitude requires huge investments and a large skill development program for timely completion. As of now large scale discrepancies are present in acquisition, design and planning, implementation of innovative technologies which have a direct impact on execution. So, better focus is needed on all parameters if the government is keen to see this project through successfully.
Lack of incentive to private players – While thrust on encouraging private sector participation can provide the answer to India’s urban housing predicament, there are multiple concerns owing to which developers are hesitant to enter into this segment. Although, tax benefits have been announced to encourage more builders to take up construction of affordable homes, its turnaround will be difficult without access to cheaper capital as the margins are very thin in this space. Additionally, lack of proper infrastructure and the cumbersome approval process delay the commencement of work which impacts the overall profitability. Therefore, the government should address these issues to make the space more attractive for private players.
No property records- To avail interest subsidy on a home loan, proper title documents play a key role. However, land and property records are currently not digitized and remain in poor condition. This continues to be a major hindrance in the execution of the scheme laid out by PMAY. With most of the people dwelling in ancestral homes and the ownership in the name of their deceased parents or the slum dwellers with no property rights, such subsidies could not be availed.
Clear communication & Co-ordination: In a project of this magnitude it is important for all the parties concerned to communicate effectively so that there is no confusion. This is lacking here as at times experts from various fields do not interact with each other. For instance, it is not possible to conceive a project or plan transportation without understanding the commute patterns in a city. So, co-ordination amongst the implementing agencies will be extremely important for a project of this magnitude.
Illegal settlements- The underlying problem of the inability to achieve housing for all not only lies in lack of resources from the Government but also participation of people. A large segment of the population that this scheme will eventually cater to prefer residing in slums located in the heart of cities to meet their day to day economic, commutation and security needs. This is the foremost reason why houses constructed by the government remain unoccupied. Hence, significant chunk of problems shrouding the Indian housing system are not really due to absolute homelessness, but due to illegal settlements that are not fit for human habitation, bereft of basic amenities needed for sustenance.
It is important to remove these bottlenecks so that the dream of our Prime Minister can be fulfilled by 2022. Else, the problems associated with the ever burgeoning population and rapid urbanization will accelerate exponentially in the coming years and may take a toll on the economic development of our country.(The writer is Chairman & MD of House of Hiranandani.)