Infra status to affordable housing gives bathware industry reasons to cheer

Union Budget 2017-18 is reformist, investor-confidence boosting and gives encouragement to real estate sector. The Government is moving with intent by giving ‘infrastructure status’ to affordable housing. It could have a vital cascading effect on a host of industries related to real estate and rapid urbanization. India needs an estimated 20-million homes in the affordable segment, and any change in policies to make the process easier is always welcome. In addition, the pronouncement of 30 sq.m. and 60 sq.m. carpet area sizes and removal of the 25-km restriction from municipal limits, makes it easier to construct affordable houses.

This step is in sync with Prime Minister Modi's ambitious ‘House for All’ mission by 2022. The new status will help enhance resource allocation for the sector to meet the growing demand for housing. The various incentives, subsidies, tax benefits and institutional funding offered to developers will further boost the real estate and construction industry across the country and in turn benefit the economy at large.

This has received a lot of cheer not only from the real estate sector itself but also from a lot of allied industries including sanitary ware, cement, machinery, paints, flooring, iron, architect etc. which are encouraged by speedy urbanization. Also, since construction is also one of the key focus areas for the Make in India initiative, manufacturing of high quality low cost products from the real estate and ancillary industry will receive a mega boost. The Make in India programme is crucial for the economic growth of the nation as it will utilize the existing Indian talent base, creating additional employment opportunities and empowering secondary and tertiary sector.

The Indian real estate market is expected to touch US$ 180 //billion by 2020. The housing sector alone contributes 5-6 per cent to the country's Gross Domestic Product. In India, real estate is the second largest employer after agriculture and is slated to grow at 30 per cent over the next decade. Yet a majority of Indian’s live in makeshift homes and can only aspire to own a home.

The growing concentration of people in urban areas has led to problems of land shortage, housing shortfall and congested transit. This has severely compromised on basic amenities such as infrastructure, water, power and open spaces of our towns and cities. Urbanisation has resulted in the poor and the economically weaker sections of people living in slums and squatter settlements primarily due to the steep rise in prices of land and real estate in urban areas that have forced. This wide gap between the demand and supply of affordable and low cost housing will be compressed with the efforts of the government push towards affordable housing.

The smart city project has again topped the list in the 3,600 Crore NDMC budget the third time in a year. Affordable Housing is going to play an important role in the smart cities project. With the growing population creating increased pressure on metropolitan centers, there is an urgent requirement for smart cities. People working in metro cities that wish to bring a part of their urban life back to their small hometowns would also increasingly look at affordable housing for good quality living. The smart cities mission offers endless opportunities to infrastructure companies, not just for business, but also in terms of actively participating in driving the nation towards rapid growth.

With a combination of incentives and facilitation, the government has been able to make the private sector a willing partner in this mission.

Affordable Housing has moved from basic brick and mortar structures to well-designed modern apartments with smart technologies.
Architects and designers are looking at working on such projects to do innovative work. Eminent architect’s such as Hafeez Contractor are also lending their names to affordable housing projects.

Affordable Housing has had tremendous success in countries like Hong Kong and Singapore which have successfully accommodated a fast-growing urban population over the course of time.

Affordable housing holds significant aspirational value for a customer, whose current living conditions are compromised. And, thanks to the current budget and incentives provided by the government to private developers they are taking pride in contributing to the overall mission of housing for all. Overall with the support of the government, the real estate sector is on a positive path.

(The article is authored by Rajesh Mehra, Director & Promoter, Jaquar Group)