Hous­ing, a re­ju­ve­nated sec­tor

Banking Frontiers - - Editor’s Blog - N. Mo­han Mo­bile : 9322895820 Email : mo­han@bank­ingfron­tiers.com

The con­cept of af­ford­able hous­ing had re­mained a dream for most of the time for lack of any co­he­sive poli­cies or gen­uine ef­forts on the part of suc­ces­sive gov­ern­ments. How­ever, the cur­rent govern­ment has given it an im­pe­tus with spe­cific schemes and pro­grams and sup­ported by leg­is­la­tions. The ‘Hous­ing for All by 2022’ pro­gram and sig­nif­i­cant schemes like Prad­han Mantri Awas Yo­jana Grameen and Prad­han Mantri Awas Yo­jana Ur­ban are in­di­ca­tors of the govern­ment’s in­ten­tions in this re­gard. Un­der these schemes, some 50 mil­lion houses are to be built by 2022. The govern­ment has in­creased the bud­getary sup­port for these schemes from `11,600 crore in FY16 to `29,043 crore in FY18.

The es­ti­mate is that In­dia would need 4 crore houses (at the cur­rent level of the pop­u­la­tion), which fig­ure may go up tak­ing into con­sid­er­a­tion fac­tors like the growth in pop­u­la­tion, mi­gra­tion, bet­ter liv­ing con­di­tions and ris­ing in­come lev­els. Some of the sops that the govern­ment is pro­vid­ing to home seek­ers are a sub­sidy of 6.5% at the low­est rung of the ladder, cred­it­ing the en­tire sub­sidy of a 20-year loan to the loan ac­count of the ap­pli­cant, which re­duces the EMI, and even 90% with­drawals from the prov­i­dent fund ac­counts. An­other pos­i­tive de­ci­sion is ac­cord­ing in­fra­struc­ture sta­tus for af­ford­able hous­ing. Be­sides, the new pub­lic-pri­vate part­ner­ship pol­icy for af­ford­able hous­ing al­lows ex­tend­ing cen­tral as­sis­tance of up to `2.5 lakh per house to be built by pri­vate builders even on pri­vate lands.

Hous­ing sec­tor, as a whole, has also been positively im­pacted by 3 ma­jor de­vel­op­ments - the en­act­ments of Real Es­tate (Reg­u­la­tion and De­vel­op­ment) Act 2016 in March 2016 leading to the con­sti­tu­tion of Real Es­tate Reg­u­la­tory Au­thor­ity (RERA) in states and the Goods and Ser­vices Tax in March 2017 and the de­mon­e­ti­za­tion of `1000 and `500 notes in Novem­ber 2016.

A De­cem­ber 2017 sur­vey by FICCI-NAREDCO-Knight Frank has in­di­cated that the realty sec­tor in the coun­try is gain­ing mo­men­tum. While there has been a lag in quar­ter 2 and quar­ter 3 of 2017-18, be­cause of the un­cer­tain­ties of the leg­is­la­tions, there are vis­i­ble signs of re­cov­ery, says the sur­vey.

It is es­ti­mated that af­ford­able hous­ing fi­nance would be a `6 lakh crore busi­ness op­por­tu­nity by 2022. The op­por­tu­ni­ties in the sec­tor has given a fil­lip to hous­ing fi­nance com­pa­nies to take up the chal­lenge. Most of them are pos­i­tive about the im­pact of the govern­ment ini­tia­tives and are gear­ing up to meet the de­mand for fi­nance.

There is al­ways a flip side. A sub­stan­tially high por­tion of the short­age of af­ford­able homes is ex­pe­ri­enced by the eco­nom­i­cally weaker sec­tions (slum dwellers) and low­in­come groups. How would mem­bers of these two seg­ments be­come ca­pa­ble of meet­ing the fi­nan­cial re­quire­ments of own­ing houses needs to be vi­su­al­ized. Oth­er­wise, de­vel­op­ers will build homes and there could be a glut in the mar­ket, which may in turn lead to a col­lapse of the sec­tor. There are also is­sues like avail­abil­ity of land, lack of special fi­nance pack­ages by banks for de­vel­op­ers un­der­tak­ing low cost hous­ing, as well as much-im­proved in­flow of for­mal credit to the seg­ment.

These is­sues must well be ad­dressed for this novel ef­fort to be made a re­al­ity.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.