hous­ing for all

The gov­ern­ment’s vi­sion of Hous­ing for All by 2022 re­quires about 11 crore houses to be de­vel­oped with an in­vest­ment of more than US$2 tril­lion

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - HT Es­tates Cor­re­spon­dent ht­es­tates@hin­dus­tan­times.com

Hous­ing plays an im­por­tant role in ac­com­mo­dat­ing high ur­ban growth in In­dia. How­ever, sev­eral struc­tural is­sues are bot­tle­necks, re­strict­ing de­sired growth in the hous­ing stock in In­dia. The NAREDCOKPMG in In­dia study, De­cod­ing hous­ing for all by 2022 - In­dia’s com­mit­ment to in­clu­sive, sus­tain­able, and af­ford­able de­vel­op­ment, launched at the NAREDCO con­ven­tion re­cently high­lights some key con­cerns and strives to pro­vide an agenda that needs ac­tion by Cen­tral and state gov­ern­ments, and ur­ban lo­cal bod­ies, to meet the vi­sion of Hous­ing for All by 2022.

“The gov­ern­ment’s vi­sion of Hous­ing for All by 2022, re­quires about 11 crore houses (about 35,000 houses each day) to be de­vel­oped with an in­vest­ment of more than US$2 tril­lion. With the com­pounded an­nual growth rate in in­vest­ment of 5% to 6% in the hous­ing sec­tor wit­nessed in last few years, a short fall of about US$500 to 600 bil­lion in in­vest­ments is en­vis­aged to meet the vi­sion by 2022. About 70% of the hous­ing needs un­til 2022 are es­ti­mated to be con­cen­trated in nine states, with Ut­tar Pradesh and Ma­ha­rash­tra ac­count­ing for 18% and 9% re­spec­tively,” it says.

Fur­ther, it is the ur­ban af­ford­able hous­ing (houses for EWS/LIG house­holds) where ma­jor support is re­quired. Sev­eral req­ui­site poli­cies and reg­u­la­tions pro­mot­ing bet­ter co­or­di­na­tion be­tween hous­ing stake­hold­ers; del­e­ga­tion of power to ur­ban lo­cal bod­ies; ra­tion­al­i­sa­tion of statu­tory charges and taxes; a relook at de­vel­op­ment norms; and steps to help re­duce project cost and sched­ule over­runs need to be in­tro­duced, says Neeraj Bansal, part­ner and head of real es­tate and con­struc­tion, KPMG in In­dia.

The KPMG study es­ti­mates that 70% of the hous­ing needs would be con­cen­trated in the states of Ut­tar Pradesh, Bi­har, Ma­ha­rash­tra, West Ben­gal, Mad­hya Pradesh, Andhra Pradesh (in­clud­ing Te­lan­gana), Ra­jasthan, Tamil Nadu, and Kar­nataka.

To achieve the vi­sion of Hous­ing for All by 2022, the gov­ern­ments (Cen­tral and state) need to ac­cel­er­ate th­ese ef­forts to a broad base and sig­nif­i­cantly aug­ment pub­lic-pri­vate-part­ner­ship pro­grammes. Ac­cel­er­at­ing the growth in the sec­tor may also help turn around the slug­gish GDP growth wit­nessed in the last few years.

About ` 9.5 tril­lion (US$ 150 bil­lion) is cur­rently in­vested in the real es­tate sec­tor an­nu­ally, of which about 80% or ` 6.6 to 7.2 tril­lion (US$ 130 bil­lion) is in­vested in hous­ing de­vel­op­ment.

Thus, in­vest­ment in hous­ing needs to be dou­bled, which can be achieved if in­vest­ments are steadily in­creased by 12% to 13% per an­num through 2022.

To at­tract higher in­vest­ments, the gov­ern­ment could con­sider in­creas­ing in­sti­tu­tional lend­ing to the sec­tor, in­tro­duc­tion of long-term hous­ing bonds to at­tract house­holds and pri­vate sav­ings, and strength­en­ing of do­mes­tic eq­uity and debt mar­kets.

Also, grant­ing in­fra­struc­ture sta­tus to the hous­ing sec­tor, es­pe­cially af­ford­able hous­ing, could as­sist in open­ing cer­tain ad­di­tional fund­ing av­enues in ad­di­tion to di­rect tax ben­e­fits. This may help the realty sec­tor at­tract funds from in­surance com­pa­nies, who are man­dated to invest 15% of their funds in the so­cial and in­fra­struc­ture sec­tor.

In the last decade, there have been re­forms in ref­er­ence to the wide spec­trum of real es­tate is­sues such as land ac­qui­si­tion, reg­u­la­tion to pro­tect cus­tomer in­ter­ests, open­ing the doors to for­eign in­vestors, and the in­tro­duc­tion of Real Es­tate In­vest­ments Trusts (REITs).

In­dia would re­quire about 11 crore hous­ing units to achieve the 2022 vi­sion. There­fore, to en­able the coun­try to achieve this vi­sion, the gov­ern­ment needs to strengthen the real es­tate sec­tor by stream­lin­ing the ar­chaic norms and pro­ce­dures of ur­ban lo­cal bod­ies and by in­cen­tivis­ing stake­hold­ers to make it lu­cra­tive.

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