Need of Housing in India

Housing is an important economic good in the consumption basket of a household. As it relates to

the living of human beings, it is tied to their security. Therefore, an improvement in housing status
leads to the development of household in true sense - both economic and social. Moreover,
housing activity is tied with many other sectors of economy, as well as the life stages of individual
and his/her social network. Improvement in housing, on both qualitative and quantitative
parameters, leads to an increased welfare of individual and the society not only by providing the
vital shelter but also by offering room for improved health, education and nutrition. These
characteristics of housing have prompted several governments to undertake the responsibility of
housing provision, which India has also undertaken for almost 40 years after its independence.

It has the potential to contribute to a rise in national income, because of the linkages with various
other sectors providing goods and support services. It also has the potential to add value over a
longer duration even after house construction and because of this advantage it also contributes to
the employment to a good extent. Housing production is Labour intensive process in India, since
the cost of Labour is low and the relative cost of capital is high.

Impact of Policies on Housing sector

 Affordable housing for all with special emphasis on urban poor
 Strategic framework in multiple partnership of state with various stakeholders,
cooperatives etc.
 Security of tenure, water sanitation, health, education and social security
 Interest subsidy on Housing loans availed by EWS/LIG availed for acquisition/
construction of houses
 Loan repayment period permissible 15 to 20 years
 Incentives land assembly for affordable housing
 Land to be provided at nominal cost for economically weaker sections and controlled
price for LIG and MIG
 Partnership between Govt. and Private sector