Housing for All 13-quarters of a century later

Imagine how it feels, when you are told even 3 quarters of a century after independence almost a quarter of Indian house-holds lack adequate housing facility.

A glance of where we are and where we need to be can put things into perspective. ‘The Numbers plate’ tells all and we need to crunch these numbers wisely lest we wont reach vision 2022 to deliver housing for all. View Numbers Plate, Table 1 and Box 1 to get an insight into the plight of situation and the enormous task ahead.

The new dispensation has raised a slogan for shelter.

Housing for All 2At last the rulers have proclaimed! ‘A shelter (of their own) for all’ – It’s now official with a ‘timeline cap! Let’s see the momentum it gathers.

The Government in June this year launched its ‘Housing for All by 2022’ mission and approved a substantial increase in interest relief on loan for the urban poor to promote affordable homes. The Union Cabinet with its approval for launch of “Housing for All by 2022” has targeted housing encompassing all urban areas to provide for shelter for those without a roof over their heads and taken in its fold all States/Union Territories and cities for this venture, aiming at, shelter for all by the time the nation reaches the three quarter century mark since independence.Housing for All 3

Yes, indeed, it’s here and taking off now; Therefore, in the current narrative, my intent is put forth as to what are the proposals, theirHousing for All 4 projections, legitimate support initiatives, possible flip sides, risks involved and the huge benefits that lie ahead. The will to achieve nurtured with focus on goal, is what the fundamental need of the hour is; The tangibles are there (technical expertise, financial-capital, land resource etc or can be managed, it is the intangibles (like respecting contractual commitments in time, quality, cost terms) that the sector needs to exhibit, given the willingness of the government to be proactive and facilitate.

The sector should take cue from prevalent positive sentiment visible from the gesture, outreach and actual offerings so as to endeavor to deliver!

Housing for All 5‘Easy on pocket’ rather than ‘easing the pocket’

The Union Cabinet chaired by Prime Minister Narendra Modi accepted the recommendations of an Inter-Ministerial Committee to increase interest subvention to 6.50 per cent on housing loans to beneficiaries belonging to economic weaker section (EWS) including slum-dwellers and low income groups (LIGs). The Cabinet’s decision benefits urban poor by an amount of ₹ 2.30 lakh each and as a result of this, the monthly EMI would come down to Rs. 2,852 per month.

At present, with the interest rate of 10.50 per cent, the current EMI on admissible loan component of Rs. 6 lakh, over 15-year loan duration works out to be Rs. 6,632 per month. With the cabinet deciding on credit-linked subsidy to 6.50 per cent, EMI comes down to Rs. 4,050 per month, benefiting the urban poor by Rs. 2,582 per month.

On the whole, central assistance in the range of Rs. 1 to 2.30 lakh per beneficiary would be provided under different components of the National Urban Housing Mission in urban areas to build 2 crore new houses to meet the housing shortage, over the next 7 years.

As per the earlier approval of the Union Cabinet, there are four components to the National Urban Housing Mission, that is Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource; Promotion of affordable housing for weaker section through credit linked subsidy; Affordable housing in partnership with Public & Private sectors and Subsidy for beneficiary-led individual house construction or enhancement. The availabilities under these have been taken forward, namely:

In the first category, under the redevelopment plan of slums with the participation of private developers using land as a resource component, a central grant of Rs. 1 lakh on an average per beneficiary would be provided. The States/Union Territories are at a liberty to use this grant for any slum redevelopment schemes to be taken up to make such projects viable, if required. Central grant of Rs. 1 lakh per house, on an average, will be available under the slum rehabilitation programme. A State Government would have flexibility in deploying this slum rehabilitation grant to any slum rehabilitation project taken for development using land as a resource for providing houses to slum dwellers

In the second category, affordable housing through credit- linked subsidy scheme, an interest subsidy of 6.50 per cent on each housing loan to EWS and LIG beneficiaries would be provided by the central government. Under the Credit Linked Interest Subsidy component, interest subsidy of 6.5 percent on housing loans availed upto a tenure of 15 years will be provided to EWS/LIG categories, wherein the subsidy pay-out on NPV basis would be about Rs. 2.3 lakh per house for both the categories.

In the third category, affordable housing in partnership with private and public sectors, central assistance of Rs. 1.50 lakh to each beneficiary would be provided to promote housing stock for urban poor. This is allowed only when 35 per cent of dwelling units of the projects proposed are earmarked for EWS category.

In the fourth category, under individual beneficiary-led construction or enhancement of houses, a central assistance of Rs. 1.50 lakh would be provided to each eligible urban poor beneficiary to enable him build his own house or undertake improvements to the existing houses.

Buyer demand assessment is to be made by the States and Union Territories based on online registration through integration of Adhaar Number of Jan Dhan Yojana accounts. The Union Cabinet while broadly approving the urban component of ‘Housing for All’ scheme had desired an Inter-Ministerial Committee to further fine tune the Urban Housing Mission.

(See Box 2 PMAY under ‘Housing for All’ Mission)

Pre Qualifications & Preferences

The scheme will be implemented as a Centrally Sponsored Scheme except the credit linked subsidy component, which will be implemented as a Central Sector Scheme. The Mission  prescribes certain mandatory reforms for easing up the urban land market for housing, to make adequate urban land available for affordable housing.
The mandatory reforms form part of the MoAs and include the doing away with the requirement of separate non-agricultural permission in case land falls in the residential zone earmarked in any city master plan and amending plans earmarking land for affordable housing. Another major reform is to do away with approvals below certain built up area or plot size for EWS and low income groups.

Preference has been marked for property title to go in the name of female members. Thus, Houses constructed under the mission would be allotted in the name of the female head of the households or in the joint name of the male head of the household and his wife. (see Box 2 PMAY under ‘Housing for All’ Mission)

Phased Geographical Spread

The scheme will cover the entire urban area consisting of 4041 statutory towns with initial focus on 500 Class I cities and it will be implemented in three phases as follows, viz. Phase-I (April 2015 – March 2017) to cover 100 Cities to be selected from States/UTs as per their willingness; Phase – II (April 2017 – March 2019) to cover additional 200 Cities and Phase-III (April 2019 – March 2022) to cover all other remaining Cities. However, there will be flexibility in covering number of cities in various phases and inclusion of additional cities may be considered by the Ministry of Housing & Urban Poverty Alleviation in case there is demand from States and cities and have capacity to include them in earlier phases. Credit linked subsidy component of the scheme would be implemented across the country in all statutory towns from the very beginning.

Dimension of the task at present is estimated at 2 crore. Exact number of houses, though, would depend on demand survey for which all States/Cities will undertake detailed demand assessment for assessing actual demand by integrating Aadhar number, Jan Dhan Yojana account numbers or any such identification of intended beneficiaries.

Technological facilitation

Housing for All 6A Technology Sub-mission under the Mission would be set up to facilitate adoption of modern, innovative and green technologies and building material for faster and quality construction of houses. The Technology Sub-Mission will also facilitate preparation and adoption of layout designs and building plans suitable for various geo-climatic zones. It will also assist States/Cities in deploying disaster resistant and environment friendly technologies.

The Technology Sub-Mission will coordinate with various regulatory and administrative bodies for mainstreaming and up scaling deployment of modern construction technologies and material in place of conventional construction. The Technology Sub-Mission will also coordinate with other agencies working in green and energy efficient technologies, climate change etc.

The Technology Sub-Mission will also work on the following aspects: i) Design & Planning ii) Innovative technologies & materials iii) Green buildings using natural resources and iv) Earthquake and other disaster resistant technologies and designs.

The Mission will also compile best practices in terms of affordable housing policies of the States/UTs designs and technologies adopted by States and Cities with an objective to spread best practices across States and cities and foster cross learning. The Mission will also develop a virtual platform to obtain suggestions and inputs on house design, materials, technologies and other elements of urban housing.

Allow me here to quote the much hyped line of ‘In the spirit of cooperative federalism’, the Mission will provide flexibility to States for choosing best options amongst four verticals of the Mission to meet the demand of housing in their states”.

It means the process of project formulation and approval in accordance with ‘Mission Guidelines’ will be in the States’ hands, and this devolution is supposed to get projects formulated, approved and implemented faster. The Mission will provide technical and financial support in accordance to the Guidelines to the States to meet their targets which ought to focus the HFA 2022 challenge of urban housing.

Real Estate Revival – Ensuring Housing  Boosting Economy

By HFA, addressing multiple core issues could become possible. It will help in reviving the real estate sector which is currently crawling. Industry stalwarts do agree that it will definitely help the real estate sector. Like Manoj Gaur, President, CREDAI NCR says “Every stakeholder of the industry would get benefited by this step. As the Cabinet gave its approval for launch of Housing for All by 2022 with salient features such as; subsidy for beneficiary-led individual house construction, promotion of affordable housing for weaker section through credit linked subsidy, and rehabilitation of slum dwellers,”.

“Thus, this decision will be a boon for affordable and weaker section of the society,” Gaur adds.

The move will also bring in opportunities for developers and investor. The move will encourage developers to focus on affordable segment. Pradeep Jain, chairman, Parsvnath Developers Ltd, says, “It will also promote PPP model in the sector. Overall, we see that action is taking place at policy level.”

“The relief to builders also comes in the form of an order to the States and Union Territories to end the requirement for land conversion from agricultural to residential, if the land is already marked as residential in zonal plan. This will en-sure time bound clearances for layout approvals and building plans by urban local bodies,” adds Rajesh Prajapati, Managing Director, Prajapati Constructions.

Everyone will agree to one point and that is, that the real estate sector is no good shape and needs a break. This overreach could be just that and make it shift its foot from the Brakes where it was jammed till now, to the other

Pedal we call the Accelerator!!

And everyone can be pleased too be-cause the Housing for All project if it works will give the economy the much needed boost. This is what India Rating and Research (Ind-Ra) reveals. As per Ind-Ra the Housing for All (HFA) project will give the Indian economy a boost. Provided the project is able to the ramping up of the existing urban infrastructure, fast tracking of approval processes and also targeting the actual beneficiary.

The direct benefit of HFA to the economy is estimated to be Rs. 15 trillion in a seven-year time frame (FY16-FY22). “Funding of the investment through public-private partnerships and ramping up the supply of raw materials for construction namely steel and cement are big challenges for the execution of the HFA scheme. Municipal services such as supplying piped water, sewerage, sanitation and municipal solid waste management are also far from being equipped to take on a project of this magnitude in the next seven years,” it said.

Apart from providing impetus to the construction sector, the scheme will in-crease employment opportunities and help grow the services sector. Sectors supplying crucial inputs to the construction sector, such as cement, iron and steel, will also grow, it added. The growth of other sectors will depend on the strength of the forward and backward linkages of the construction sector with the rest of the economy. As the output of sectors supplying inputs to the construction sector increases, it will increase the demand for goods and services in the economy due to higher income generation.

“The economic impact of the scheme will also be felt at the state level. The biggest beneficiary of this will be Uttar Pradesh, followed by Maharashtra and West Bengal. These are the top three states in terms of housing shortages and increased construction activities will help these states’ economies to grow,” said Ind Ra.

The housing sector has tremendous potential as it is a major enabler as well as contributor to the economy. It is among the largest contributor to the exchequer and second largest employer. The sector also supports 250 other ancillary industries and has a huge multiplier effect on the economy. Proper nurturing of the sector could help increase its share from 6 per cent in 2013 to 10 to 12 percent by 2022.

So what it means is HFA can be a win-win for every stakeholder the government, the Real estate sector and the people at large. And the HFA takes in its fold the towns, metros and the ‘smart’ ones round the corner!

All Round Rush – The scheme takes off!

Housing for All 7No doubt within two months of the launch of the Housing for All (Urban) Mission, 15 States have signed Memorandum of Agreement (MoA) with the Ministry of Housing & Urban Poverty Alleviation committing themselves to implement six mandatory reforms essential for making a success of the housing mission in urban areas. 305 cities and towns also have been identified in nine of these states for beginning construction of houses for the urban poor.

By signing the MoA, the States have taken up the responsibility of implementing the six reforms which include:

1.    Doing away with the requirement of separate Non Agricultural Permission (NAP) in case land falls in the residential zone earmarked in the Master Plan of city or town.
2.    Preparing or amending Master Plans earmarking land for Affordable Housing.
3.    Putting in place a single-window-time bound clearance system for layout app-rovals and building permissions.
4.    Doing away with approvals below certain built up area/ plot size in respect of Economically Weaker Sections and Low Income Groups.
5.    Legislating or amending existing rent laws on the lines of the Model Tenancy Act circulated by the Ministry of HUPA.
6.    To provide additional Floor Area Ratio (FAR)/Floor Space Index/Transferable Development Rights (TDR) and relax density norms , for slum redevelopment and low cost housing.

States that have agreed to implement the above reforms include: Andhra Pradesh, Bihar, Chattisgarh, Gujarat, Jammu & Kashmir, Jharkhand, Kerala, Madhya Pradesh, Manipur, Mizoram, Nagaland, Odisha, Rajasthan, Telangana and Uttarakhand.

305 cities and towns in nine of these states have been identified for building houses for urban poor. These include Chattisgarh (36 cities/towns), Gujarat (30), Jammu & Kashmir (19), Jharkhand (15), Kerala (15), Madhya Pradesh (74), Odisha (42), Rajasthan (40) and Telangana (34).

Under the Housing for All initiative of the Central Government, names as ‘Pradhan Mantri Awas Yojana and launched by the Prime Minister Shri Narendra Modi on June 25 this year’, 2 crore houses are targeted to be built for the poor in urban areas by the year 2022, coinciding with the 75 year of Independence.

Under this urban housing mission, central government will provide an assistance in the range of Rs.  1.00 lakh to Rs.  2.30 lakh per house under different components of the Scheme including In-situ re-development of slums using land as resource, Credit linked Subsidy Scheme, Affordable Housing in Partnership and Beneficiary led individual construction/ improvement.

With the announcement of lists under Smart City Mission, AMRUT and Housing for All, there has been a clear convergence of implementation of the three schemes. The 9 states that have identified 305 cities for housing for urban poor, also account for 26 smart cities and 136 AMRUT cities. Of these, smart city mission, AMRUT and Housing Missions will be implemented in 25 smart city aspirants enabling convergence of schemes and resources of State and Central governments. In 136 AMRUT cities, housing projects will also be undertaken.

In case of Telangana, both the smart city aspirants of Greater Hyderabad Municipal Corporations and Warangal, AMRUT and Housing missions will be implemented. Similarly, in other AMRUT cities of Adilabad, Karimnagar, Khammam, Mahaboobabad, Miryalaguda, Nalgonada, Nizamabad and Suryapet, Housing for All mission will be implemented resulting in convergence.

Minister of Urban Development and Housing & Urban Poverty Alleviation Shri M.Venkaiah Naidu has welcomed this convergence. He said : “This convergence of urban schemes helps in better utilization of resources resulting in visible improvement in urban areas. I am glad that state governments are resorting to convergence based approach as intended by the central government.”

Landing 18.76 million homes in 8 years! :

With a vision in place, 8 years is all it may take to fill the deficit of 18.76 homes. This is what was brought out in a recent conclave held by the Confederation of Real Estate Developers Associations of India (CREDAI), a pan India representation of the real estate fraternity and the urban development ministry focused on ‘Housing for All’.
Mr. Venkaiah Naidu, Minister Urban Development and Housing and Urban Poverty Alleviation and Mr.P Muralidhar Rao, National General Secretary, BJP talked about the development plank of the government, claiming India as being globally recognised and most countries wanting to invest in and partner with India. The talk went on to say that for realising the country’s potential in terms of housing and infrastructure, the central government is open to PPP (Public Private Partnership) ventures and visionary entrepreneurship.

Anuj Puri, chairman and country head, Jones LangLa Salle says, “A new discourse in housing has taken place. Real estate hopes for a good time with talks about REITs, liberalisation of FDI, Smart Cities and affordable housing, with a timeline of 2022.”

Sure, a new discourse has begun, but it has go with ‘No- holds- barred’ if delivery has to be guaranteed. This leads us straight from the claims to the details. And as always, the ‘Devil is in the Detail’. There is no alternative and so let’s plunge into it, even if not to the extent of getting soaked!

Even then a few discussion points emerge that need to be put at rest:

1.    ‘Accept urbanization is real & fast ‘

The housing shortage as of now stands at no less than around 18.76 million units. The government vision and sector delivery would realizable subject the provisions for scope of development to accommodate the migrant population. The cities should be made ready to be able to take the load of such influx, by way of amenities & civic facilities. Planning the scope of urbanisation means a lot because e ac-cording to figures available not less than 10 million migrants annually add on to these urban cities. It is said that by easing regulations could translate to well around 30 million housing units that could be built without compromising on affordability.

2.    ‘Regulations, disbursement, innovation & skilling

The Regulations whatever they be should be clear, lean and be in place fast; Fast track disbursement is essential for timely delivery , innovation and skill development is core. In essence across the board in this sector the cry has always been on for simplified environmental laws & need to relax the Floor Space Index (FSI); institutionalisation of rental housing, time bound clearances of approvals and reforms are ones to be taken into consideration. The developer fraternity keenly looks to these fructifying and government could do better and fast if affordable housing is to become a reality in the near future

Another important dimension that becomes pronounced is skill & innovation along with welfare aspect. Increase in funds for Research and Development for construction, need for disruptive innovation and skill development of construction workers, and extending fiscal tax exemptions for construction workers are a real prop up to the human dimension that actually boosts productivity. These aspects have been shown to have delivered definite results and have simply to be copied by all to benefit.

In Kerala, 65,000 apartments have ta-ken an exemplary lead when the CREDAI chapter of the city adopted a zero garbage disposal scheme. Similarly, the Pune chapter went in for skill development of construction laborers,  which aspect is an essential one to improve productivity-cum-reliability in delivering affordable housing in mass scale.

Housing for All 9A glimpse at the need of skill input can be had from figure on the huge ‘demand-supply gap’ shown Figure 3.
As per a KPMG-PMI study on project schedule and cost overruns, it is that 92 million resources would be required in the construction industry by 2022. To help deliver the mandate of more than 11 crore houses,focus on training would have to be spearheaded by the government and private sector to bridge this gap. See Figure 1:  Skills – Demand Supply Gap (KPMG-PMI study 2012)

3.    Online is the ‘New bottom line’

There can be no two opinions on one issue and that pertains to ‘On line’ dealings v/s ‘Of line’ ones. In present context online means speed of approval, clearance, status tracking and above all ‘accountability’. Therefore the ministries as well as Regulators should  be made to transact online so that not just No Objection Certificates (NOC’s), but all documentary clearances are online based ensuring no human interface. Besides corruption it will reduce costs & save enormous time. so consumers wouldn’t need to personally approach the ministry for these.

Housing for All, Is it a Tall order?

The government has said, announced, promised and showcased quite a few things. Yet is it still a tall claim that is unachievable? At the outset though if viewed dispassionately, the current government’s ‘Housing for all by 2022’ promise does seem a bit unrealistic at the moment. But, having said this, it also does seem that if the right modalities be followed by concrete measures then even this goal is achievable. Therefore the positive way to look at it is that delivering 2 crore urban houses and 4 crore rural houses though a huge undertaking in itself, can be made possible by a joint mechanism of:

–    Sustained government interest and investment and
–    Substantial private sector investment and involvement.

All stakeholders will have to pool-in resources unambiguously, meaning rights v/s obligations etc should be crystal clear and right intent should be essence of contracts.

For this to happen there needs to be a clear, well-thought out policy document outlining the exact deliverables and accompanied by methods/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 seven years in all to achieve this target, it fundamentally involves construction of 30 billion square feet of housing stock, or approximately 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).

So lets see what all come in the way obstructing and what all pitfalls to avoid

–    In an earlier 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. Also setting up a Mission on Low Cost Affordable Housing, was to be anchored in the National Housing Bank. It needs to be cautioned that  the track record of government-built housing in terms of quantum and delivery timelines has been appallingly low. Therefore policy document needs to clearly stipulate deliverables.
–    The roadblocks that continue in non availability of land, easy credit and robust involvement of construction experts, town planners and the private sector to expressly thrash out obstructions is needed to expedite targeted deliveries.
–    Does the problem get over even by making land available and/ or  increasing the FSI which also adds up incentives to developers undertaking low-cost housing projects? No, even then there is a need for systemic change in government perception of the issue of housing delivery. One such aspect pertains to approval speed as already indicated above which demands to go ‘online’. Broadly put, Regulatory changes, faster approvals, removal of red tape and resolution of land litigation issues need to be adequately addressed to improve stakeholder participation. The matter of doing away with the consent clause for the affordable housing segment though is debatable and should be prudently dealt with. Extremes never are a sustainable solution.

Hence, one suggestion is to take re-course to a three-pronged approach involving the state, regulatory bodies and the executing agency/private player all together as a comprehensive instrument cohesively to deliver. An effective state government can also play a role in bringing synergy of its own housing policy with that of the Centre and thus revitalize the role of the development authority as more of 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. Why this? Because the DA serves its real role of a overseer than an execution agency, which the developer is better equipped to.

Housing for All 10Thus once when DAs accept expertise of developer, the latter should also accept sure-shot delivery dates. Thus they should accept Execution penalties in right spirit & as necessary deterrents, Suitable fiscal incentives to the private industry as well as financial support through cheaper industry loans will also be required to ensure healthy participation. Easier said than done in this sector, but not impossible that due diligence should be done while pre-qualifying execution agencies/ principal contractors. 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.

Summing up, the following needs to be addressed (see Table 3 Reforms Needed: What, By Whom & By When)

–    At the core, High urbanisation rate by itself and it coupled with high rate of migration from rural areas.
–    An effective policy framework for EWS and LIG housing, Rising land cost, Escalating construction costs, and inadequate availability and reach of micro-finance measures.
–    Sub-optimal usage of urban land (low FAR/FSI) has resulted in raising the cost per unit of built-up area.
–    Long gestation period of six to eight years, affected further by multiple approvals needed from multiple authorities; stretching further by two to three year.
–    Increased cost of capital and time Inadequate long-term funding across the project life cycle necessitating multiple rounds of funding for the same project, increasing the cost of capital and time. Further, the funding is not available for acquiring of land from banking sources.

Promote Rental Housing

Housing for All 11A mix of rental and ownership housing is required to address affordable housing needs effectively. Rental housing is important for addressing the needs of low-income residents in the context of a rapid rise in the urban population. However, rent control policies aimed at protecting tenants have had their consequences of deterring investments in rental housing in India, causing the share of rental stock to decline from 54 per cent in 1961 to 27.5 per cent in 2011 which drove EWS/LIG households into slums. (see Figure 4 Declining Trend of Rental Housing -The right mix of ownership v/s rental housing stock needed) Further, the Government housing programmes promoted ownership housing and did not look at creating rental stock, a feasible first option for EWS/LIG households. (see Table 3 Reforms Needed: What, By Whom & by When)

Granting infrastructure status

Housing for All 8A long standing demand to overcome many impediments discussed above has been to give Infrastructure status to the housing sector, especially affordable housing. This could assist in opening certain additional funding avenues in addition to direct tax benefits available to the infrastructure sector. This move may help the sector attract funds from insurance companies, who are mandated to invest 15 per cent of their funds in social and infrastructure sectors (as per the Insurance Regulatory and Development Authority regulations). It may consider qualifying affordable housing projects to raise funds through tax free infrastructure bonds. The similarities of Infra & Housing are presented in Table.2. for an introspection. (see also Table 3 Reforms Needed: What, By Whom & by When

Will the Tortoise turn? if so When ?

I for one fully endorse what TN Ninan writes in “The Turn of the Tortoise-The Challenge and Promise of India’s Future” on privatization’s help in growth:

Housing for All 12“The last quarter century’s experience has shown that when the private sector is asked to provide telecom services, run airlines and airports, build and run ports, undertake banking, distribute electricity and even undertake water supply, the result is usually (though not always, for there is no shortage of private banks and airlines that have failed) a substantial improvement on what, the government was doing until then.” So given the facilitation private players can turn most of the in-hospitable tide in the nation’s favor (read ‘growth’).

Therefore, the date the government unfurled the HFA flag its goal post was clear and fixed at 2022 with an time phased geographic & numeric spread. Any doubt was calmed when stakeholders saw it going ahead with measures in the right direction even if on ground nothing yet had concretized. The only positive has been the intent of the current dispensation to move ahead with definite thought and the belief that stakeholders had reposed on it by a thumping majority in the country’s parliament. Seeing it ‘Walk the talk’ is getting overdue and overstretching honeymoon may not go well with anyone. The slogan has to move from the drawing board to an actionable plan where stakeholders at each level are clearly identified and made accountable for facilitating real, ground level development of low-cost housing. The private sector as partner in this initiative is subject to the issues which need to be resolved as already discussed herein above.

If all do their bit then the 2022 HFA is not a distant dream. And if it is achieved in right earnest, why would the government of the day not grant infrastructure status to (all such initiatives &) real estate sector as such, thereby enabling it access easy and cheaper finance which in turn it can return by aiding faster development. So the need is for ‘The plug and play’ model!

An extended Wrap up !

And what is that supposed to be? Well, so to say, coined it right now. In fact just when I had wrapped up happy with the ‘plug & play’ model, there comes this News Flash on this diwali wednesday. The Breaking News, forces me to go this one para more. Bet the reader will more than agree!!  Now ‘The News’.

1.    A Plus! – Tax Relief Owners & Tenants both!

Housing for All 13The housing ministry has proposed that urban house owners and tenants be given direct and indirect tax relief -by the Centre, state governments as well as the local administration -to encourage rental accommodation to meet the needs of migrants. The draft `Rental Housing Policy’ notes that since renting of homes is treated as a commercial activity , the yield for owners stands reduced owing to the ensuing increased property tax for individuals and service taxes for institutional rental housing operators such as hostels, PG accommodations.“Higher outflow due to commercial treatment deters the growth of rental housing,“ says the report, which has been circulated to states for their feedback.

Arguing for putting in place a robust `Rental Housing Policy’, the ministry has suggested different “need based rental housing“ models to address the diverse housing needs of various segments of the population“. Considering the fact that the poor and those with a small income may not be able to lspay rent, the policy recommends that states or urban local bodies can incentivise poor owners and enants through subsidies and tax incentives or rental vouchers. The vouchers provided to urban poor can be used to top up the rent they are paying to move into a habitable space.( see Figure 2  illustrating the Proposals). Now we need to see how this POSITIVE helps meet target.

2.    Hey, Its GREY!- Govt tweaks funding pattern of 17 key central schemes:

In a major decision that could adversely affect social sector schemes funding pattern of 17 centrally-sponsored schemes have been brought down to 60:40 between the Centre and states. Besides others this includes Swachch Bharat Abhiyan, National Rural Drinking Water Program, Housing for All, Smart City Mission, Atal Mission for Re juvenation and Urban Trans formation (AMRUT) all of which pertain to habitat.

We need to watch how this tweaking translates on ground once the details are out. Anyway consistency is one thing government is expected to maintain. And they know it’s importance.

3.    Watch Out! – Inside & Outside: Money Matters:

Analysts fear waning of FII interest in 2016. With Goldman Sachs shutting its BRICS investment fund and merging it with its emerging markets fund, most analysts are predicting an end to the BRICS theme. “If India does not figure in the in-vestment theme for 2016, the country will find it difficult to get cheap funding to finance growth. The political situation is not particularly impressive and the risks for the India story appear elevated. Hence, the correction this time may be time-consuming,“ said Ashish Vaidya, head of trading at DBS Bank.

Though with `relatively robust’ growth prospects, the Indian economy is projected to expand by 7.2% this fiscal but two vital factors that can play spoil sport are difficulty in passing key structural re-forms and large non-performing loans as per Paris based think tank OECD. Thus cheap funding from outside by way of FII could be at risk as also capital mobilization internally may be affected if structural reforms do not take off at full speed, not to say of well known surmounting NPAs with banking sector!

No one would know this better than the FM!

Author’s Bio

The author leads our Delhi bureau. An Engineer and qualified ADR professional (NALSAR alumnus), Sadagopan Seshadri has been a senior Contract Management Professional in large national & International Companies. His domain experience is in Building Products, Cement plants and Mega Power project execution. He has been an expert visiting faculty and univ. examiner for Contract Management at the SSAA, IP University, New Delhi. Being passionate about Environment he has now turned to Landscape Projects de-sign teamed with like-minded architects & engineers for sustainable landscapes development He is vocal with his views on these areas through his writings.

He can be reached at: design2xcel@gmail.com


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