IAS Gyan

Daily News Analysis


14th May, 2024 Economy


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  • With the 2024 elections underway, housing has emerged as a critical issue in India. Beyond merely shelter, housing encompasses various facets including homelessness, the quality of existing housing stock, infrastructure inadequacies, and affordability challenges.
  • These issues collectively paint a picture of a housing crisis that demands urgent attention from policymakers and stakeholders.

Magnitude of the Crisis:

  • India's housing crisis is underscored by stark statistics.
  • The 2011 Census identified approximately 1.7 million homeless individuals across the country. However, this figure likely underestimates the true extent of homelessness, as it does not fully capture those living in informal settlements, on pavements, or in other precarious housing situations.
  • A 2012 report indicated a need for nearly 18.78 million additional housing units to meet the existing demand.
  • Subsequent studies, such as the one conducted by the Indian Council for Research on International Economic Relations (ICRIER) in 2020, revealed a 54% increase in urban housing shortage, reaching a staggering 29 million units by 2018.
  • This shortage encompasses various categories, including housing for the homeless, as well as inadequate, obsolete, and congested housing.

Vacant Units vs. Unmet Demand:

  • One puzzling aspect of India's housing landscape is the coexistence of vacant housing units alongside unmet demand.
  • Analysis by the Centre for Social and Economic Progress of the 2011 Census data revealed that while there were 11 million vacant housing units, there remained a shortage of 19 million units.
  • This discrepancy underscores a systemic issue where housing supply fails to align with the needs of the most vulnerable segments of society.

Affordable Housing Parameters:

  • The concept of affordable housing is central to addressing India's housing crisis.
  • Defined by the government as properties with an area not exceeding 60 square meters and priced under ₹45 lakh, affordable housing aims to provide accessible housing options to low and middle-income individuals and families. However, the implementation and availability of such housing remain major challenges.

Sales Trends and Segment Disparities:

  • Recent sales trends highlight disparities within the housing market.
  • While overall housing sales reached an all-time quarterly high in the first quarter of 2024, the distribution of housing units across different segments is uneven.
  • Mid-segment homes dominate the new housing supply, comprising 33% of total units, while affordable housing accounts for a mere 18%.
  • This trend is further exacerbated by a decline in the share of affordable housing sales, dropping to approximately 20% in the first half of 2023, according to reports.

Economic Viability Concerns:

  • One of the primary reasons for the limited availability of affordable housing is the economic viability of such projects.
  • Experts have highlighted the challenges posed by high land costs and construction material expenses.
  • Without subsidies or other forms of support, developers often find it financially unfeasible to undertake low-cost housing projects, further exacerbating the affordability crisis.

Impact of Housing Issues:

  • The ramifications of India's housing crisis extend beyond mere shelter.
  • Urban congestion, inadequate housing conditions, and the proliferation of slums are some of the visible consequences.
  • The 2011 Census revealed that over 65 million people, approximately 5% of India's total population, lived in slums.
  • These informal settlements often lack access to basic amenities, perpetuating cycles of poverty and marginalization.

Implemented Policies to Address Housing Challenges

Recognition of Housing as a Fundamental Right:

  • The Supreme Court of India has recognized housing as an integral part of the fundamental right to life under Article 21 of the Constitution. This landmark decision has laid the foundation for governmental interventions aimed at ensuring housing security for all citizens.

Rural Housing Initiatives:

  • The Indira Awaas Yojana (1985) stands as the first significant policy intervention by the government to address rural housing needs.
  • This program was specifically designed to provide housing assistance to the rural poor, aiming to uplift living standards and mitigate housing inadequacies in rural areas.

Focus on Urban Housing:

  • With rapid urbanization and the proliferation of urban slums, the government shifted its focus towards urban housing initiatives. The Jawaharlal Nehru National Urban Renewal Mission (JNNURM), launched in 2005, marked a significant step in addressing urban housing challenges.
  • This mission aimed at revitalizing urban infrastructure and improving the living conditions of urban residents through various development projects, including housing.
  • The recommendations of the Parekh Committee report in 2008 spurred further urban housing interventions. These interventions included the implementation of schemes like the Rajiv Awas Yojana and Rajiv Rinn Yojna.
  • The Rajiv Awas Yojana focused on slum rehabilitation and the development of affordable housing in urban areas, aiming to provide adequate housing for slum dwellers and low-income urban residents.
  • On the other hand, the Rajiv Rinn Yojna aimed at facilitating access to affordable housing finance for urban residents, particularly those from economically weaker sections.

Housing for All Schemes (2015-22):

  • In line with the commitment to ensure housing security for all citizens, the government launched the Housing for All schemes under the leadership of Prime Minister Narendra Modi. These schemes, spanning from 2015 to 2022, aimed to address both rural and urban housing challenges comprehensively.

Under the Housing for All initiative, two key components were introduced:

  1. Pradhan Mantri Awas Yojana (Gramin): This scheme focused on providing housing assistance to the rural poor, aiming to construct pucca houses for households without adequate shelter. By targeting rural areas, the scheme aimed to uplift the living standards of rural communities and promote inclusive development.
  2. Pradhan Mantri Awas Yojana (Urban): Addressing the housing needs of urban areas, this scheme aimed to provide affordable housing solutions to urban residents. By focusing on urban housing, the scheme targeted the challenges posed by urbanization, including slum proliferation, inadequate housing, and homelessness.

Pradhan Mantri Awas Yojana-Urban (PMAY-U):

  • Launched by Prime Minister Narendra Modi in June 2015, PMAY-U aims to address urban homelessness and provide affordable housing solutions for urban residents. The ambitious target set by PMAY-U was to provide houses for 1.18 crore families by December 2024. However, as of March 2024, it has achieved only around 67% of its target, equating to approximately 80 lakh houses.
  • Initially slated for a seven-year duration from FY 2015-16 to FY 2021-22, PMAY-U's timeline has been extended until December 31, 2024, with the exception of the Credit Linked Subsidy Scheme. This extension aims to complete houses sanctioned up to March 31, 2022.
  • Notably, around 83% of the houses to be constructed under PMAY-U are not intended for the urban landless poor but rather for families with access to capital and land.
  • The slum rehabilitation scheme within PMAY-U has sanctioned only 2.96 lakh homes, indicating a gap in addressing the needs of urban slum dwellers.

Challenges in PMAY-U Implementation:

  • Despite progress, challenges persist in achieving the goals of PMAY-U, including insufficient housing units sanctioned under certain verticals like In situ re-development of slums (ISSR).
  • Affordability remains a major concern, with interest rate subventions failing to match housing costs, particularly in larger cities.
  • Accessibility to credit for economically weaker sections (EWS) and low-income groups (LIG) remains limited due to informal employment and self-employment.
  • Inconveniently located projects and lack of basic urban services contribute to the emergence of 'new urban slums' and impact livability and livelihoods.
  • The top-down approach to housing supply limits the involvement of low-income households in decision-making processes, leading to mismatches between housing offerings and actual needs.
  • Complicated land acquisition processes and outdated regulations contribute to high land prices and increased housing costs.
  • Lukewarm interest from private players, coupled with a lack of technical expertise, leads to underutilization of funds and suboptimal project outcomes.

Recommendations for Improvement:

  • Overcoming legislative and bureaucratic hurdles is essential for expediting land supply, particularly for slum redevelopment and informal settlements.
  • Subsidy amounts under verticals like ISSR need to be revised upwards to ensure affordability.
  • Beneficiaries' input should be solicited to tailor housing projects to their needs, fostering a participatory approach to implementation.
  • Collaboration with financial sector regulators can streamline access to capital and reduce intermediation costs for PMAY-U beneficiaries.
  • Encouraging planned supply of affordable housing by the private sector is crucial, necessitating policy interventions to incentivize participation.
  • Reflecting on past experiences and integrating learnings into existing policies can inform more effective strategies for housing the urban poor.

Pradhan Mantri Awas Yojana-Gramin (PMAY-G):

  • PMAY-G, launched by the Modi government in 2016, aims to construct 2.95 crore houses in rural areas.
  • Under this scheme, each unit constructed receives ₹1.3 lakh in assistance, with funding split between the Centre and State governments at a ratio of 60:40.
  • As of April 30, 2024, the PMAY-G dashboard reports that a total of 2.6 crore houses have been completed, marking significant progress towards achieving the scheme's targets.
  • Notably, data shared by the government indicates that as of September 29, 2022, over 69% of houses constructed under PMAY-G were either wholly or jointly owned by women, highlighting the scheme's focus on women's empowerment and gender equality.

State Housing Schemes:

  • In addition to national-level initiatives, various state governments have introduced their own housing schemes to address the housing needs of their citizens. One notable example is the Navaratnalu-Pedalandariki Illu scheme launched by the Andhra Pradesh government.

Andhra Pradesh's Navaratnalu-Pedalandariki Illu Scheme:

  • Under this initiative, the state committed to constructing 21.76 lakh houses, with a substantial outlay of ₹56,700 crore. The scheme's objective is to uplift the living standards of the state's residents by ensuring access to adequate and affordable housing.
  • As of October 2023, significant progress has been made, with the completion of construction for 7.43 lakh houses.
  • To support this initiative, the state government has reportedly acquired more than 77,000 acres of land.

Focus on Women Empowerment:

  • A notable aspect of the Navaratnalu-Pedalandariki Illu scheme is its emphasis on women's empowerment.
  • The government highlighted its intention to register the houses in the names of women beneficiaries.
  • This strategic move aligns with the broader societal trend of recognizing women as key stakeholders in development initiatives and empowering them economically and socially.

Way Ahead

Creating Incentives in the Market:

  • The International Finance Corporation (IFC), along with other investors, has committed funds to affordable housing finance firms and projects, addressing the lack of private equity investment.
  • To make affordable housing commercially viable, there's a need to align the agenda of developers with national missions and create an environment conducive to affordable housing development.

Overcoming Bottlenecks:

  • Streamlining land acquisition and approval processes can facilitate faster and more affordable housing development.
  • Leveraging green and advanced technologies can reduce construction costs, making housing more affordable.

Emerging Schemes and Partnerships:

  • Public-private partnerships are gaining traction, such as Maharashtra's plan to build 1.1 million houses with World Bank support and projects by companies like Shapoorji Pallonji Group.
  • Affordable housing hubs like Attibele near Bangalore are attracting investment due to their proximity to major cities and affordable land availability.

Innovative Approaches:

  • Incorporating mass housing zones in city master plans and improving land record systems can encourage housing development.
  • Public housing initiatives alongside market-based solutions are essential to address the needs of low-income workers.

Borrowing Ideas from Successful Models:

  • Learning from countries like China and Indonesia, India can adopt diverse approaches to affordable housing, including low rent housing, public rental systems, and cross subsidies.
  • Addressing issues such as vacant low-cost homes and inadequate infrastructure is crucial for effective urban planning and housing provision amidst rapid urbanization.


Q. Discuss the challenges and opportunities in achieving affordable housing for all in India, taking into account the role of government policies, private sector participation, and socio-economic factors.