PM Modi’s ‘Housing For All’ to remain a distant dream?

Can Prime Minister Narendra Modi really provide housing for all by 2022? Well, considering the present market conditions, industry experts call it a far-fetched idea.

“Making 2 crore urban houses and 4 crore rural houses available is a huge undertaking in itself, and will require not only sustained government interest and investment but also substantial private sector investment and involvement,” said Anuj Puri, country head of JLL India.

He added that in the first budget of the Modi government in 2014, along with announcement of the ‘Housing for All by 2022’ initiative, it was decided to allocate larger resources to the National Housing Bank for both rural housing and for extending credit facilities to the urban poor and those in LIG segment.

“There was also talk of setting up a Mission on Low Cost Affordable Housing, which was to be anchored in the National Housing Bank. However, the track record of government-built housing in terms of quantum and delivery timelines has been as abysmal as that of the private sector. The last budget did not indicate any further steps on the 'Housing for All by 2022' initiative,” explained Puri.

Industry experts believed that the government needs to lay down clear policy as well as outline the exact deliverables, which is accompanied by initiatives to streamline the development process.

“This entails reducing approval times while providing specific incentives to build such houses on time. Considering that the government has seven years in all to achieve this target, it fundamentally involves construction of 30 billion square feet of housing stock, or approximately 4 billion square feet per year if we assume an average of 500 square feet per house (this is in line with creating smaller houses for the rural population and urban poor),” stated Puri.

According to the industry players, the biggest challenges remain land availability, easy credit and involving construction experts, town planners and the private sector to expedite this target.

“There is a need for systemic change in how the government perceives the entire issue of housing for the urban poor. Regulatory changes, faster approvals, removal of red tape and resolution of land litigation issues need to be adequately addressed to improve stakeholder participation. While the consent clause for the affordable housing segment has been done away with in an ordinance, the government is still struggling to get it passed through parliament,” highlighted Puri.

He suggested a three-pronged strategy which involves the state, regulatory bodies and the private player, for achieving the target. Both the Central and state governments need to have their own housing policies in synergy with each other.

“Execution penalties will be deterrents, but it is essential to have the right development partners who will not put their hands up in the middle of project execution citing financial viability. Suitable fiscal incentives to the private industry as well as financial support through cheaper industry loans will also be required to ensure healthy participation,” noted Puri.

Besides, first and foremost, the government needs to get rid of multiplicity of time consuming approvals that a builder requires before he can begin the construction of the project.

Apart from eliminating red-tapism, granting infrastructure status to such projects should also be considered as this will facilitate cheaper finances for such projects.

“The plug and play approach for infrastructure as enumerated in the Budget makes for an ideal blueprint to begin with for the Centre and the states so that the entire focus is towards timely delivery of housing units, which is what everyone hopes and expects in the next seven years,” he said.