Roof for all

The decision of the Centre to increase the carpet area under its ‘Housing for all by 2022’ project has attracted positive reactions from real estate developers and intermediaries as it well might. For, the increase in carpet area by a third takes the maximum size of a dwelling unit to a whopping 2,153 sq. ft., which by urban living standards qualifies as a luxury home, the kind that developers prefer as the margins are higher. This also fits in well with the present trend in cities for large, 3-bedroom apartments as people’s aspirations rise. Those earning up to ₹18 lakh per annum can now avail up to ₹2.3 lakh as subsidy upfront which is a substantial benefit, especially for those in Tier 2 and Tier 3 towns. There seems to be a concerted attempt to give a push to the housing segment by the Centre and the Reserve Bank of India. The central bank recently revised the limit for a housing loan to be classified as priority sector from ₹20 lakhs to ₹25 lakhs in cities other than metros. It’s another matter that banks are unwilling to lend to this segment.

The objective behind these initiatives appears two-fold — increase the housing coverage and in the process give a push to employment in the construction sector and create demand for cement and steel. While these are laudable objectives the point is that the Pradhan Mantri Awaas Yojana (Urban) has already seen an upward revision in size of dwelling units in the Middle Income Group segment twice already, including the latest one. This gives rise to the question whether the focus is more on this segment — which not only has more demand but is also characterised by ability to invest — rather than on the economically weaker sections who are in greater need of support. The PMAY was intended to work through four verticals — in situ slum redevelopment, credit-linked subsidy scheme, partnering with public sector/private entities to promote affordable housing projects and assisting beneficiary-led house construction. Of these, there seems to have been meaningful focus only on the second vertical.

Granted that this government’s performance has been superior to the previous one going by available data, but it still does not measure up to its own targets. For instance, there has not been much progress on slum redevelopment or for that matter in promoting large projects jointly with public sector outfits or private developers using government land. The issue seems to be one of cooperation from States and local bodies which is why the Centre is pushing forward on the interest subsidy scheme which is entirely in its control. Yet, if the housing shortage is to be addressed satisfactorily and the lofty objective of ‘Housing for all by 2022’ is to be achieved there is no way but to work with States and promote government housing projects in a big way, especially for the weaker sections.

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