The Union budget may
accord infrastructure status to the housing sector. This will help the sector
access funds on easier terms which, in turn, will help increase availability of
houses.
“Infrastructure
status for housing is a long pending demand. Even the Ministry of Housing &
Urban Poverty Alleviation pushed for such a status last year (2012), but that
could not happen. This time there is strong possibility of a favourable
decision,” a senior Government official said Business Line.
List of
Infrastructure..!
The central
government had, on March 1, 2012, approved the harmonised list of
infrastructure sector. It has 5 categories..!
1. Transport
2. Energy
3. Water and
Sanitation
4. Communication
5. Social and
commercial infrastructure.
There are 28
sub-sectors under these heads.
The Cabinet Committee
on Infrastructure also set terms for inclusion of new sub-sectors.
According to that
decision, new sub-sectors proposed by a particular agency could be included
only when the 6 characteristics of infrastructure are applicable.
These are..!
1. Natural monopoly
2. High sunk costs
and asset specificity
3. Non-tradability of
output,
4. Lack of
alternative choices in consumption
5. Possibility of
price exclusion
6. Presence of
externalities.
In addition, one or
more of 3 parameters (namely its importance to the scheme of economic
development, its ability to contribute to human capital and the specific
circumstances under which it has developed in India) had to be met.
The apex housing
industry association NAREDCO (National Real Estate Development Council), claimed that housing was part of
infrastructure till 1999.
Even the World Bank
treats housing as part of infrastructure, it had argued. It also said that
developing townships and / or housing colonies involves creation of physical
and social infrastructure.
These include roads,
water & electricity networks, drainage & water harvesting, sewerage
treatment and disposal, solid waste treatment and disposal & educational,
medical & recreational facilities, which are all part of infrastructure.
A report of the
technical group on ‘Urban Housing Shortage’ estimates the housing shortage
as 18.78 million units in 2012. (million = 10 lakh)
The highest shortfall
is in the economically weaker section - EWS (10.55 million units), followed by
Lower Income Group (LIG) with 7.41 million.
NAREDCO said that the central
Government, on its own, is not in a position to meet the shortfall &
private developers do not find it a viable business model because of huge land
cost, high credit rates & poor purchasing power of buyers in these
categories.
There is a feeling
that infrastructure status to housing will improve fund flow to the sector,
both from internal & external sources, and incentivise developers to
undertake construction of affordable houses, thereby, augmenting housing
supply.
Src: The Hindu
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