Housing For All By 2022 in India: Far-Fetched Or
Feasible?
by Mr. Anuj Puri, JLL India
Viewed dispassionately, the central current government's 'Housing for
all by 2022' promise seems a bit unrealistic at the moment, as the
modalities & concrete steps needed to be undertaken to achieve this goal
have not been spelled out.
Making 2 crore urban houses & 4 crore rural houses available is a huge
undertaking in itself, and will require not only sustained government interest
& investment but also substantial private sector investment and
involvement.
In the previous budget, the announcement of Housing for All was accompanied
by increased allotment to the National Housing Bank for both rural housing and
for extending credit to the urban poor / EWS / LIG segment.
There was also talk of setting up a Mission on Low Cost Affordable Housing,
which was to be anchored in the National Housing Bank (NBB). However, the track
record of government-built housing in terms of quantum and delivery timelines
has been as abysmal as that of the private sector. The last budget did not
indicate any further steps on the 'Housing for All by 2022' initiative.
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| Anuj Puri, JLL India |
Reducing approval times..!
If this very ambitious goal is indeed to be met, there needs to be a clear,
well-thought out policy document outlining the exact deliverables and
accompanied by methods / or initiatives
to streamline the development process. This entails reducing approval times
while providing specific incentives to build such houses on time.
Considering that the government has 7 years in all to achieve this target,
it fundamentally involves construction of 30 billion square feet of housing
stock, or / about 4 billion square feet per year if we assume an average of 500
square feet per house (this is in line with creating smaller houses for the
rural population and urban poor).
To state that this is an ambitious objective is perhaps an understatement.
Without a clear roadmap in place, it is likely to remain unachievable.
The roadblocks remain in ensuring land availability, easy credit and
involving construction experts, town planners and the private sector to
expedite this target.
FSI to Incentivise Developers..!
The problem is not merely a function of making land available and
increasing the FSI to incentivise developers undertaking low-cost housing
projects. There is a need for systemic change in how the government perceives
the entire issue of housing for the urban poor.
Regulatory changes, faster approvals, removal of red tape and resolution of
land litigation issues need to be adequately addressed to improve stakeholder
participation.
While the consent clause for the affordable housing segment has been done
away with in an ordinance, the government is still struggling to get it passed
through parliament.
A three-pronged approach involving
the state, regulatory bodies & the executing agency / private player is of
the essence.
Housing policy..!
The respective state governments will also play a major role in synergising
their own housing policy with that of the Centre and revitalising the role of
the development authority as more a facilitator with contracts being awarded to
private players / semi-government agencies such as HUDCO and NBCC utilising the
Budget’s ‘plug and play’ mechanism, where all approvals and linkages are
already in place.
Execution penalties will be deterrents, but it is essential to have the
right development partners who will not put their hands up in the middle of
project execution citing financial viability.
Suitable fiscal incentives to the private industry as well as financial
support through cheaper industry loans will also be required to ensure healthy
participation.
Government's target..
Even if all these fall in place, the government's target remains a stiff
one and its agencies’ track record of delivery or assisting industry through
removal of multiplicity of time-consuming approvals in the past does not
provide a lot of confidence.
The only positive has been the intent of the current dispensation to move
ahead with definite thought.
The slogan has to move from the drawing board to
an actionable plan where stakeholders at each level are clearly identified
& made accountable for facilitating real, ground level development of
low-cost housing.
The issues which need to be resolved before the private sector will be a
willing partner in this initiative have been documented earlier.
Infrastructure status
Other aspects like granting of infrastructure status to like projects
should be explored. This will provide easy and cheaper finance aiding faster
development.
The plug & play approach for infrastructure as enumerated in the Budget
makes for an ideal blueprint to begin with for the Centre and the states so
that the entire focus is towards timely delivery of housing units, which after
all is the result everyone hopes and
expects in the next seven years.
About the author
Mr. Anuj Puri is Chairman &
Country Head at JLL India
For media contact
Arun Chitnis
Head – Corporate Communications & Media Relations
JLL India
Level 6, Amar Avinash Corporate Plaza
Bund Garden Road, Pune 411001.
Tel: (020) 3093 0441 Fax: (020) 4019 6101
Mob: +91 96571 29999
Website: www.joneslanglasalle.co.in
Twitter: JLLIndia_Realty
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