Government needs to implement effective policy for affordable housing: CBRE
Although the Interim Budget announcement supporting affordable housing was welcomed by the real estate industry, the segment has a long way ahead as yet. To begin with, there is considerable supply shortage in this arena pegged at 18.78 million for the 12th Five Year Plan (2012–2017) by the Ministry of Housing and Urban Poverty Alleviation Ministry (HUPA),of which 96% is in the EWS and LIG categories. Housing shortage for the EWS stands at almost 11 million homes, while that for LIG stands at 7.41 million homes. Fairly recently, the government had set up a committee to develop a slum index at the city, state and national levels to sharpen its policy focus on the urban poor. Slum data (source: HUPA) released in March 2013 for Census 2011 had pointed out that around one out of every six households in urban India (17.4%) lived in a slum. It had also shown that well over a third of all slum households (38%) were in cities with a population in excess of a million.
A key push was given to the housing sector, with the allocation of INR 6,000 crore for the Rural Housing Fund, and INR 2,000 crore for the Urban Housing Fund, at the Interim Budget 2014–15. However, with a substantial amount of funds already allocated for the creation of affordable and/or low-cost, mass housing in the previous fiscal left unused, the effective utilization of fund allocation for affordable housing cannot be stressed enough. According to HUPA, as of February 20, 2013, as against a target of 3.10 lakh beneficiaries with a total outlay of INR 1,100 crore, approximately 13,485 beneficiaries had been benefitted with a net present value (NPV) of interest subsidy of INR 16 crore. Additionally, although about INR 2,000 crore had already been allocated to the Urban Housing Fund, the National Housing Bank (NHB) is yet to set up this fund.
The Cabinet Committee on Economic Affairs approved the launch of the Rajiv Awas Yojana (RAY) as a Centrally Sponsored Scheme (CSS) to be implemented during 2013–2022. It also approved the continuation of Affordable Housing in Partnership Scheme (AHP) as part of RAY, with amendments. It was decided to continue the Interest Subsidy Scheme (ISS) for Housing the Urban Poor (ISHUP) and rechristening it as the Rajiv RinnYojana (RRY).
As of January 31, 2014, a total of 121 projects had been under the preparatory as well as implementation phases under RAY—across 19 states/union territories and 84 towns/cities— at a total project cost of INR 5,010.20 crore for housing and infrastructure projects. Of this total approved amount, about INR 462.49 crore have been released for various projects, while INR 905.00 crore is yet to be released.
Earlier central assistance under the scheme was limited to INR 50,000 per dwelling unit or 25% of the cost of all civic services (external and internal), whichever was lower. This assistance was to be given as subsidy for project developers both in the private as well as public sectors. As per the recommendations of the Affordable Housing Task Force ( AHTF), the scheme has been amended to provide INR 75,000 per EWS/LIG dwelling unit for housing and internal development components, with an objective to improve private sector participation in affordable housing.