India needs to go on a much faster track to develop new homes in comparison to its current momentum. The difficult part since its decades has been building homes for the affordable segment. Nevertheless, 2015 was the year that finally saw rational policies and denotations put into action through the elaborate “Housing for All 2022” plan by the Government of India. A few benchmark declarations led to a consistent rise in affordable housing endeavors. The union budget for FY 2015 – 16 gave the below-listed schemes and incentives directed at affordable housing:
- Bringing infrastructure within the ambit of affordable housing, providing developers with the ability to reach out to reasonable means of financing, inclusive of external commercial borrowings (ECBs).
- Affordable housing developers now have more time to culminate their projects – the due dates have been stretched to five years instead of the present three years.
- The eligibility standards for affordable housing has undergone a revision of 30 square meters and 60 square meters as carpet area, instead of the previously marketable area, for metro cities and smaller towns separately.
- New Credit Linked Subsidy Scheme (CLSS) for the middle-class income segment was declared with a prerequisite of Rs 1,000 crore.
Ever since constructive transformations have featured in roll out of affordable housing projects. Year 2017, between January to September has seen around 26,000 units being launched, which beats the previous year’s statistics by 27%. Right from April 2015 (after the declaration of interpretation of affordable housing) till September 2017 the overall roll outs of affordable housing components in prime cities is approximated in excess of 77,000 units. As the Government of India zeroes down on “Housing for All”, low-priced housing fragment is anticipated to go on with the same momentum.
A most lucrative proposal for both, developers as well as consumers, affordable housing attracts a powerful demand that is primarily never satisfied by the supply. The consistent spotlight of the central government has given rise to the emerging of more funding alternatives for the developers like ECB, FDI and debt financing from national financial institutions at more and more attractive rates. Nevertheless, affordable housing projects in Tier 1 cities are confronted by the intricacies of land costs and accessibility, which is problematic in prime areas.
To be consistent with the impetus, the tough challenge to deal with is the acquirement of land. In the metro cities of Mumbai, Delhi – NCR and now Bangalore, there is a dearth of land within the vicinity of the city and that is made even more difficult with the exorbitant costs. These are the demotivating factors that deter builders from building affordable houses.
It is inevitable that land be made obtainable at suitable costs to meet the demand of more than 10 million units of housing within city limits. Hence, the government has to take into account an organized policy of making available non-essential land specifically that which is reserved under the PSU’s assets. In the same way, there are land that has been in reserved for the announced SEZs that are lying dormant since long.