Housing is a challenging issue all over the world, particularly in developing nations like India. It has turned into a top need of the administration and the society at large to address this issue. According to recent research, by 2025 over half of the Indian population will live in urban settlements looking for steadiness and wage (Anon n.d.). Similarly by 2030, about 590 million individuals will live in urban areas. On the other hand the supply of formal affordable housing has continually lingered behind household projections. Furthermore, the Technical Group on Urban Housing Shortage (2012-17) has pegged the aggregate housing shortage at 18.78 million staying units. Out of the total shortage more than 96% are for the Economically weaker sections (EWS) and Low income group (LIG) classes (Paper et al. n.d.).
Mismatch of supply and demand of affordable housing
One can define the affordable housing on the basis of three parameters:
INR 150000 to 300,000 Up to 300 sq ft EMI to monthly income: 30 – 40 %
Income level (per annum)
Size of unit
|Economically Weaker Section ( EWS)||<INR 150,000||Up to 300 sq ft||EMI to monthly income: 30 – 40 %|
|Lower income group (LIG)|
|Middle income group||INR 300,000 to 1 million||600 to 1200 sq ft||House price to annual income –less than 5.1x|
The demand drivers for affordable housing in India includes dynamic urbanization. Firstly, with increasing migration of people from rural to urban areas and process of rapid urbanization are major factors for increasing affordable housing demand in India. Secondly, the development of the urban populace, rising wages have prompted to the extension of middle class. Lastly, the land segment is noteworthy in the Indian economy. Furthermore, the land area added to 6.3% of the gross domestic product in 2013-14, at an expected 3.7 trillion and utilized around 7.6 million individuals (Reddy 2013).
However there is increasing gap between the supply and demand of the affordable housing. The Ministry of Housing assessed a housing shortage of 18.78 million houses during the twelfth arrangement time frame. With 99% of it being in the economically weaker section and the low income housing space.
Financial institution initiatives
In India, real estate sector is one of the most important contributor to the economy. A major proportion of income is invested into housing segment which adds to the gross domestic product (Studies 2014). One can comprehensively characterize the different financial institutions working in the range of Indian housing finance sector into two sector. The formal sector and the informal finance sector.
The formal sector incorporates the housing fund institutions like:
- National Housing Bank (NHB),
- Housing and Urban Development Corporation (HUCDO),
- Housing Development Finance Corporation (HDFC),
- Life Insurance Corporation of India (LIC) and
- General Insurance Corporation (GIC).
On the other hand the informal finance sector incorporates individual investment funds, borrowings from cash loan specialists or companions or relative transfer of existing property and so on. Some of the major financial institutions working on affordable housing are as follows:
Housing and Urban Development Corporation (HUDCO)
It was established in 1970 and the main focus of this development corporation was to guarantee housing, urban improvement and foundation advancement. 55% of housing fund of HUDCO was for the low income and weaker segments of the public. Similarly Housing Development Finance Corporation (HDFC) was incorporated in 1977. Major plans of this new institution was to fund low and middle wage group to buy or build a solitary family dwelling unit. Since commencement, it has helped more than 4.4 million to claim their very own home.
National Housing Bank (NHB)
It was joined in 1988 which controls, manages and gives refinance to housing fund organizations and banks working in the field of housing.
Life Insurance Corporation (LIC)
Similarly, Life Insurance Corporation (LIC) has been playing a major part in affordable housing finance. It yields unique credits to state governments for redoing and repairing the houses hurt by catastrophes like flood, cyclone, and earthquake and other natural disasters.
For Example the Life Insurance Company has played a key part in surrendering a sizeable measure of cash related help to the Apex Co-operator Housing Finance Societies (ACHFS) in Andhra Pradesh and Karnataka. This fund was used for financing affordable housing plans suggested for the scheduled castes and scheduled tribes. Substitute arrangements introduced by Life insurance Company were the`Own your Home Scheme’ and the “Possess your Apartment”(Yearbook 2005).
India Mortgage Guarantee Corporation (IMGC)
Similarly, India Mortgage Guarantee Corporation (IMGC) was set up in June 2012 . The main aim of this project was to make early home possession a genuine probability through the arrangement of ensured home loans. It benefits the home purchaser (borrower) by letting initial installment sums and expanded home possession at a quickened pace and improves advance accessible at terms (Anon n.d.).
At the national level, the country housing division falls inside the domain of the Ministry of Rural Development. On the other hand housing and human settlements in urban regions is the ward of the Ministry of Housing and Urban Poverty Alleviation. Major government initiatives for affordable housings are as follows:
- the Indira Awas Yojana National Urban Housing and Habitat Policy (NUHHP-2007),
- Jawaharlal Nehru National Urban Renewal Mission (JNNURM-2005),
- Basic Services for the Urban Poor (BSUP),
- Integrated Housing and Slum Development Program (IHSDP),
- Pradhan Mantri Awas Gram Yojana (PMAGY-2015) and
- the Rajiv Awas Yojana.
Indira Awas Yojana
It was started in the year 1985-86 with the expectation to give housing to the rural poor. The vision of the legislature is to supplant all transitory (kutchcha) houses from Indian towns by 2017. The physical focus for development during 2013-14 is 24.81 lakh houses. However the scheme was able to build only 10.93 lakh houses and 23.76 lakh are under development. During 2013-14 a sum of 13,894.90 crore was assigned for the development of 24.81 lakh houses and 12,970 crore was discharged (Jones Lang LaSalle Research 2012).
Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
Similarly, establishment of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was to empower and speed up urban reform. It incorporates inside its ambit development of 1.5 million houses for the urban poor in 65 mission urban areas in the vicinity of 2005 and 2012. The term of this mission was planned to be seven years starting from December 2005. However, later it was stretched out by two more years upto 31 March 2014(Yearbook 2005).
Basic Services for the Urban Poor (BSUP)
Basic Services for the Urban Poor (BSUP) comes under the Ministry of Urban Development. Furthermore, it tries to give seven qualifications namely:
- security of residency,
- affordable housing,
- training and government managed savings to low wage fragments in 65 mission urban communities.
Integrated Housing and Slum Development Program (IHSDP)
It covers those urban communities/towns that are not secured by Basic Services for the Urban Poor scheme. It imagines a 80:20 sharing proportion between the national and state governments or urban nearby bodies (ULBs) or recipients (Gopalan & Venkataraman 2015).
Rajiv Awas Yojana
Rajiv Awas Yojana was propelled by the Ministry for Housing and Urban Poverty Alleviation in 2011. The main objective of the plan was to ‘create a slum free India’. The main aim of the project is to implement the plan in about 250 urban communities and towns before twelfth five plan (2017). A list of 157 urban areas, for which fund have been discharged for preliminary work under the slum free city planning scheme. It incorporates all metros and other major cities such as Visakhapatanam, Ahmedabad, Shillong, Bhubaneswar and Varanasi(Jones Lang LaSalle Research 2012).
The Pradhan Mantri Awas Yojana (2015)
This scheme conceives to give housing to all by 2022. The mission looks to give 20 million housing units and take up slum restoration ventures. As indicated by the mission rules, an ‘affordable housing venture’ should have at least 35% of the houses for the economically weaker section (EWS) class. These families are those having a yearly wage up to Rs. 3,00,000 and a residence with a cover territory of up to 30 sq.m. In addition, launch of “Housing for All” by 2022, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart City mission will give the essential fillip to build up a ‘Comprehensive Urban India’. According to estimation, the vision for “Housing for All” by 2022,’ would require improvement of around 11 crore houses with speculations of over USD 2 trillion (Patel 2016).
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- Patel, S.B., 2016. Decoding housing for all by 2022. Economic & Political Weekly, 51(10), pp.38–42.
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- Yearbook, A.S., 2005. Chapter III. , pp.114–135.