National Workshop on Pro-Poor Housing Finance

October 29, 2008, New Delhi

Government Initiatives and Programme for Affordable Housing

Ministry of Housing & Urban Poverty Alleviation Government of India

Structure of presentation
I II Housing Policies over the years Urban Housing Scenario in India

III Major Government Initiatives and Programme for Affordable Housing IV Way Forward

a new National Housing Policy announced in August. 1998  with some landmark initiatives like involvement of multi-stakeholders. . etc. new National Housing & Habitat Policy announced in July.Housing Policies over the years  First National Housing Policy in India formulated in 1988.  Further. 1994.  With change of Government in 1990. repeal of Urban Land Ceiling Act.   permitting Foreign Direct Investment in housing and real estate sector.

all these policies were generic and applicable to both rural and urban areas. the first ever urban areas specific National Urban Housing and Habitat Policy. 2007 was announced in December 2007.  However.  Taking into account emerging challenges of required shelter and growth of slums. .Housing Policies over the years…contd.

7 to 3.8% of the total population.  It is projected that by 2041.8%.  The process of urbanisation is marked by increasing concerntration in larger cities. annual growth of urban population ranged between 2.7%. During last decade it increased at annual rate of 2.  The current ratio of urban land to population to GDP is 3:30:60.  Over 5 decades.Urban Housing Scenario in India Urbanization  Indian urban population in 2001 was 27. India‟s urban population will be 50%. By 2040 it will be 3: 50: ? .

Urban Housing Scenario in India…contd.1 29.5 33.3 35.1 . Access to Housing 2001 Household having: No Exclusive Room One Room Two Rooms More than two Rooms %age of Households 2.

35 6.18 1971 (18.21 3. MoHUPA .08 2.17 No of Houses (in Million) 35 30 25 20 15 10 5 0 11.49 Pucca Semi-Pucca Kutcha 41.Quality of Housing Stock 50 45 40 47.11 18.3 8.3) Year 2001 (52.5) 1981 (28) 1991 (39.8 3.09 29.16 2.8 4.7 9.83) The figure in Parenthesis is the total housing stock (in Million) * Source: Technical Group on Estimation of Urban Housing Shortage. NBO.06) 2007 * (58.35 2.79 6.

8 46 28 90% belong to informal sector with no assurance of a steady income.Growth of Slums 61. .

2007) 24.53 million during 11th Plan Period including dwelling units the carried over housing shortage .71 million dwelling units Additional Housing Requirement for the 11th Plan (2007-2012) 1.82 million dwelling units Total housing requirement 26.4.Housing Shorage and Requiement Estimation by Technical Group Housing shortage at the beginning of 11th Five Year Plan (1.

04 m More than 99% shortage is for EWS/LIG segments – Technical Committee set up by Ministry of Housing & Urban Poverty Alleviation .4.78 m 2.71 m 21.2007: Total EWS LIG MIG/HIG  : : : : 24.89 m 0.Housing Shortage – BREAK-UP Estimated Urban Housing Unit Shortage as on 1.

600.Financial Investment Required for Overcoming Shortage Total requirement including basic infrastructure Rs.000 crore .

31 million - AHIP 1 million  In addition to this.Strategy to Deal with Housing Shortage  There is no specific target fixed in the Plan document. State sectors. HUDCO.5 million 0. HFIs/Banks and Cooperative Sector will also contribute. However.53 million will be: JNNURM ISHUP more than 1. . the strategy to deal with Housing shortage of 26.

600. 24100 crore . 18000 crore - for ISHUP for AHIP Total Rs.  As against total requirement of Rs. Housing is a State subject and the responsibility for tackling the housing shortage primarily vests with the State Governments.000 crore allocation made to this Ministry under 11th Plan for Housing: for JNNURM Rs.Key Issues & Concerns  „Land‟ and „colonisation‟ being State subjects. 1100 crore Rs. 5000 crore Rs.

 Affordable Housing in Partnership : Modification in JNNURM  Setting up of a High Power Task Force on Affordable Housing.  Interest Subsidy Scheme for Housing the Urban Poor.Major Government Initiatives and Programmes for Affordable Housing Initiatives by Ministry of Housing & Urban Poverty Alleviation  Formulation of National Urban Housing & Habitat Policy 2007.  Launch of the Rajiv Awas Yojana .  Jawaharlal Nehru National Urban Renewal Mission.

 Strategy framework is multiple partnership of States with various stakeholders.National Urban Housing and Habitat Policy 2007 Salient Features  Goal of the Policy is Affordable Housing for All with special emphasis on the urban poor.  Special emphasis has been laid on SC/ST/BC/Minorities. state parastals. empowerment of women within the ambit of the urban poor with emphasis on security of tenure. . employee welfare housing organisations. cooperatives. private sector.

affordable housing. It has two Sub-Missions :  Basic Services for the Urban Poor (BSUP) seeks to provide seven entitlements/services . The Integrated Housing and Slum Development Programme (IHSDP) seeks to provide the above mentioned 7 of tenure. water. services in towns/cities other than the Mission Cities. education and social security in low income segments in the 65 Mission Cities.  .Jawaharlal Nehru National Urban Mission (JNNURM)  JNNURM was launched in December 2005 with aim to cover construction of 1.5 m houses for urban poor during the Mission period (2005. sanitation. health.2012).

500 crore. .  Under JNNURM. subsidy of Rs.33.860 crore and Central Govt.18. more than 1.5 million houses have been sanctioned for the poor  About 1300 projects have been sanctioned covering urban India  These projects involve an outlay of more than Rs.Jawaharlal Nehru National Urban Mission (JNNURM)…contd.

Interest Subsidy Scheme for Urban Poor  A new Pilot Scheme for providing interest subsidy on housing loans availed by EWS/LIG availed for acquisition/construction of house Encourages poor sections to avail of loan facilities through Banks/HFCs Subsidy will be 5% on the interest charge for EWS/LIG upto Rs.1 lakh for the full period of the loan Loan repayment period permissible 15 to 20 years.1100 crore.       Targets to cover 0.31 million households under EWS/LIG segments Total subsidy during 11th Plan Rs. . Levy of pre-payment charges would not be permitted.

      Win-Win solution for all players – Good for everyone Scheme is biased in favour of banks.Interest Subsidy Scheme for Urban Poor…cont. Credit risk of HFIs has been reduced considerably Lot of inbuilt risk mitigants in the scheme like borrower should have a plot Subsidy is disbursed upfront on basis of NPV Repayment liability of borrowers has been considerably reduced (EMI is less than 20% of monthly household income) Scheme has received positive response from banks and States both. All concerns of banks have been incorporated in the scheme.  .

25 million EWS dwelling units.  Disbursement of funds linked to the actual provision of amenities. A normative cap per EWS/LIG dwelling unit to be fixed in consultation with the States for the purpose.  The objective of the scheme would be to support the construction of 1 million affordable dwelling units in the first phase. with a minimum of 0.  Provision of central assistance of 25% for the cost of the provision of civic services for projects for affordable housing at an approximate cost of Rs.5000 crore. .Affordable Housing in Partnership : Modification in JNNURM  Modification in the guidelines of JNNURM (BSUP) to facilitate and incentivize land assembly for affordable housing.

 State Governments could also consider seeding new areas for development through their Housing Boards.  The States would be encouraged to promote projects in the Public Private Partnership (PPP) mode in a manner in which there are competing private sector suppliers in the market for affordable housing. .Affordable Housing in Partnership : Modification in JNNURM…contd. ft.  Criterion for eligible projects:  Dwelling units should be a mix of EWS/LIG/MIG categories with the maximum size of a dwelling unit being at 1200 sq.ft super area. with at least 25% of them for EWS of 300 sq. Development Authorities as well as through the various employee welfare organizations.  The scheme will be operated in the same manner as the JNNURM.

. 1 on reducing costs of construction by technology innovation. suggesting financial instruments and other measure to reach the goal  Report submitted in December 2008  11 main recommendations of the Task Force        1 on what can be termed affordable. 1 on the need to gather statistics. 1 asking for state Boards to be revived. and  The important ones pertain to the definition. 1 addressing rental housing.Task Force on Affordable Housing  Ministry set up Task Force headed by Deepak Parekh on Affordable Housing for defining Affordability. 2 suggesting how to garner financial resources. 4 on making land available at reasonable cost. land issues and financing.  Ministry is taking a final view on the recommendation of the Task Force.

Rajiv Awas Yojana  Pursuance to the announcement made in the address of the President of India to the Joint Session of Parliament on 4.2009 considerable exercise is going on in the Ministry in consultation with Planning Commission for launching Rajiv Awas Yojna aimed at Slum Free India based on „whole city approach‟.6. .

and private sector in the form of earmarking of land for EWS/LIG .Way Forward  Central Government  JNNURM and social housing to be given stronger boost with reform emphasis. additional funds and new components  State Governments  State Housing Board to be reactivated with definite purpose and definite targets. Land to be provided at nominal cost for economically weaker sections and controlled prices for LIG and MIG    Cooperative Societies to be encouraged Effective partnership between Govt.

contd.  RAJIV AWAS YOJANA – A RAY OF HOPE to Slum Dwellers and Urban Poor . state govts. cooperative sector. parastatals. employees welfare housing societies  Rental Housing  Rental housing is to be encouraged by way of amendment in the rent control laws and also using as a tax instrument which need to be crafted to avoid evasion...Way Forward. private sector.  Partnership  Effective partnership between central government.

Looking Ahead Development of a roadmap jointly for achieving the objective of “Affordable Housing for All”. .

Thank You .