QUESTION/ANSWER ASSIGNMENT

HOUSING

(ASSIGNMENT – IV)

SUBMITTED BY – SUBMITTED TO –

JASKIRAT ARORA (1731681) AR. PREETI BHATIA

 QUESTION ANSWER – ASSIGNMENT IV

1. Write short notes on:

a) Pradhan Mantri Awas Yojana

Ans. Pradhan Mantri Awas Yojana is a Government-backed scheme launched on 1 June 2015 to
promote and encourage sustainable and affordable housing for the urban poor. It is a Credit Linked
Subsidy Scheme (CLSS), which means PMAY scheme beneficiaries are eligible for interest subsidy if
they want a loan to buy or construct a new house.

Objective of PM Awas Yojana –

1. Property and land prices are on a continuous surge in India, which has reduced affordability
significantly.
2. It is especially true for individuals residing in metropolitan cities.
3. Therefore, to promote and encourage sustainable and affordable housing, the Government
of India launched the Pradhan Mantri Awas Yojna or PMAY in June 2015.

4. Also known as ‘Housing for all by 2022’, this credit-linked subsidy scheme (CLSS) aims to

construct more than 2 crore houses for Indians belonging to particular economic sect ions.

Individuals availing loans to buy residential property or land or to construct homes would be

eligible for interest subsidies on the said credit.

5. However, the loan interest subsidy is only available for individuals belonging to Economically

Weaker Sections (EWS), Lower Income Group (LIG) or Middle Income Group (MIG).

REFERENCE – https://groww.in/p/savings-schemes/pradhan-mantri-awas-yojana/

b) JNNURM Jawaharlal Nehru National Urban Renewal Mission

Ans. The aim is to encourage reforms and fast track planned development of identified cities. Focus is to
be on efficiency in urban infrastructure and service delivery mechanisms, community participation, and
accountability of ULBs/ Parastatal agencies towards citizens.

Objectives of the Mission –

(1) The objectives of the JNNURM are to ensure that the following are achieved in the urban sector

o Focused attention to integrated development of infrastructure services in cities covered under

the Mission
o Establishment of linkages between asset-creation and asset-management through a slew of
reforms for long-term project sustainability
o Ensuring adequate funds to meet the deficiencies in urban infrastructural services
o Planned development of identified cities including peri-urban areas, outgrowths and urban
corridors leading to dispersed urbanization
o Scale-up delivery of civic amenities and provision of utilities with emphasis on universal access
to the urban poor
o Special focus on urban renewal programme for the old city areas to reduce congestion; and
o Provision of basic services to the urban poor including security of tenure at affordable prices,
improved housing, water supply and sanitation, and ensuring delivery of other existing universal
services of the government for education, health and social security.

c) NABARD

Ans. National bank of Agriculture and Rural Development is a non -bank statutory financial organization.

It is popular is in short form as NABARD.

NABARD is a Development Bank with a mandate for providing and regulating credit and other facilities
for promotion and development of agriculture, small scale industries, cottage and village industries,
handcraft and other rural craft or any economic activity in rural areas with a view to promote integrated
rural development and securing prosperity of rural areas.

It was set up on July 12,1982 under an Act of Parliament as a central or apex institution for financing
agriculture and rural sector.

Function of NABARD:

• CREDIT FUNCTION:

1.Framing policy and guideline for rural financial institution.

2.Providing credit facilities to issuing organization

3. Monitoring the flow of ground level rural credit.

• Financial Function:

1.It provides short term and medium-term loans to RRBs (Regional Rural Bank), CCBs (central
Cooperative bank) and SCBs (state Cooperative banks) and other institution involve in Agriculture and
rural development.
2.It provides long term loan to the Agriculture and allied activities, Artisans, small scale industries,
Handcrafts and other non-form sectors.

3.It directly finance the ware houses, cold storage and cold chain infrastructures. Also for food parks and
food processing units.

• Development Function:

1.Help Cooperative banks and other rural banks to prepare their action plan.

2.Monitor implementation of development action plan of banks and fulfillment of obligation under
MoU.

3.Provide financial support to training institutes of cooperative banks.

4.Helping in development of farm and non-farm sector by giving financial, technical, educational and
other supports.

• Supervisory Action:

1.Undertake inspection of RRBs, Cooperative Banks, SCARDBs, and apex noncredit cooperative societies.

d) Plotted development versus flatted development

Ans.

PLOTTED DEVELOPMENT FLATTED DEVELOPMENT

Pattern of development
Pattern of Land Ownership
Height
Land Utilization
Population/Housing density
Open Spaces
Involves development based on and
comprising of number of plots having
variable size generally of smaller size
Land generally owned individually or
jointly in the name of few
family/friends to promote individual
housing
Low rise going generally up to 3 stories
high, height
Low with larger area going under
roads, opens spaces and community
facilities
Low due to individual ownership,
depending upon individual capacity,
resources or willingness to construct
entire or part of building
Small in area - Open spaces available
within plots and held in private
ownership with limited use only by the
owners- Increases need for provision
Involves development based on plots
of larger area as compared to plotted
development
Land held in joint ownership with large
numbers of owners to promote group
housing
High rise generally going 4 or more
stories
High with smaller area going under
roads, opens spaces and community
facilities
High due to joint ownership and
depending upon combined resources
and combined effort to provide
dwelling to all land owners
Large in area- jointly held in joint
ownership to be used widely for the
benefit of all the owners. Reduces
provision of large open spaces at the
 of large open spaces at the sector level sector level
Cost of Construction Generally high in the case of low rise Generally low due to- multiple and
buildings repetitive design of dwelling units

e) Affordability in Housing

Ans. Affordable housing refers to housing units that are affordable by that section of society whose
income is below the median household income.

Though different countries have different definitions for affordable housing, but it is largely the same,
i.e. affordable housing should address the housing needs of the lower or middle income households.
Affordable housing becomes a key issue especially in developing nations where a majority of the
population isn't able to buy houses at the market price.

Disposable income of the people remains the primary factor in determining the affordability. As a result,
it becomes the increased responsibility of the government to cater to the rising demand for affordable
housing. The Government of India has taken various measures to meet the increased demand for
affordable housing along with some developers and stressing on public-private partnerships (PPP) for
development of these units.
f) Affordable Housing in Partnership (AHIP) Scheme

Ans. AHIP scheme is under JNNURM Urban Scheme.

Under AHP, a Central Assistance of Rs. 1.5 Lakh per EWS house is provided by the Government.

An affordable housing project can be a mix of houses for different categories but it will be eligible for central
assistance, if at least 35% of the houses in the project are for EWS category.

The States/UTs decide on an upper ceiling on the sale price of EWS houses in rupees per square meter of carpet area
in such projects with an objective to make them affordable and accessible to the intended beneficiaries.

State and cities also extend other concessions such as their State subsidy, land at affordable cost, stamp duty
exemption etc.

g) National Housing Bank

Ans. National Housing Bank (NHB) was set up to promote the housing sector in India. The aim behind
the formation of NHB was to promote housing finance institutions both at local and regional levels. The
bank is now a government-owned entity, serving the housing needs of all segments of the population.
However, the focus is to provide housing to low and moderate income groups.

Functions of National Housing Bank

Apart from strengthening the housing finance system, NHB also works towards achieving the below-
mentioned objectives.

• Promoting a network of dedicated housing finance institutions for various regions and different
income groups
• Making housing credit more affordable
• Encouraging the supply of buildable land and also building materials for housing
• Motivating and supporting public agencies to emerge as facilitators and suppliers of serviced
land, for housing

Government Housing Schemes Under NHB

National Housing Bank offers two housing schemes under the ‘Housing for All by 2022’ program of the
government. These are:

1. Pradhan Mantri Awas Yojana (PMAY)

2. Rural Housing Interest Subsidy Scheme
h) NSSO

Ans. NSSO stands for a national sample survey organization.

It is the organization under the ministry of statistics of the government of India.
Functions of NSSO:
1. It conducts socio-economic surveys on various subjects like employment, consumer expenditure,
health, unemployment, and medical services, etc.
2. It decides the topics to be covered in a particular survey found.
3. It conducts an annual survey of Industries every year.
4. It gives every year reports on the status of estimation of agriculture production in India.

i) Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)

Ans. The Ministry of Housing and Urban Poverty Alleviation (MH & UPA), Government of India has
designed an Interest Subsidy Scheme for addressing the Housing needs of Economically Weaker Section
(EWS)/ Low Income Group (LIG) segments in urban area under “Affordable Housing for All”, an
important policy agenda of Government of India. Such beneficiary who own land in any urban area but
do not have any pucca house in their name or of any family member will be covered under this scheme.
The Scheme has been approved by our Bank for implementation.

Purpose

The scheme is applicable for urban poor only EWS/LIG persons.

• EWS - households having an average monthly income up to Rs. 5,000.

• LIG - households having an average monthly income between Rs.5001 up to Rs.10,000.
• For salaried persons: 48- times of average of last -3- months’ gross salary.
• For others – Max. 4- times of average of last -2- years’ annual income

j) Rajiv Awas Yojana

Ans. Rajiv Awas Yojana (RAY) is also known as the Rajiv Housing Scheme.

1. The scheme, Rajiv Awas Yojana, envisions slum-free India by 2022.

2. RAY was launched by the central government in 2011 under the guidance of the Ministry of
Housing and Urban Affairs.
3. RAY envisages two-step implementation strategy, first is making slum-free City Plan of Action
and second, preparing the project as per the plan.
4. Improving and provisioning of housing, basic civic infrastructure and social amenities in
intervened slums.
5. Enabling reforms to address some of the causes leading to creation of slums.
6. Facilitating a supportive environment for expanding institutional credit linkages for the urban
poor.
 7. Institutionalizing mechanisms for prevention of slums including creation of affordable housing
stock.
8. Strengthening institutional and human resource capacities at the Municipal, City and State levels
through comprehensive capacity building and strengthening of resource networks.
9. Empowering community by ensuring their participation at every stage of decision making
through strengthening and nurturing Slum Dwellers’ Association/Federations.

k) Rental housing versus ownership housing

Ans. Pros and cons of buying and renting a home

There are pros and cons to renting a property, just as there to owning a home. Both options have their
own advantages and disadvantages, for example renting allows you more expendable money in the
short term, while owning a house gives one the sense of security as it is considered a long-term
investment. Let’s look at all the pros and cons to help you make a well-informed decision of what will
suit you, right now.

Advantages of buying a home

1. Owning a home offers the long-term benefits of security, equity and potential growth in
personal wealth

2. The value of a home will appreciate over time and if you decide to sell, you can earn a profit off
the sale.

3. When you buy a house it becomes your legal property, which allows you greater freedom in its
use without restrictions often enforced by a Landlord.

4. Being a Homeowner allows you creative control of your property. You can alter the property,
including décor changes, landscaping and renovations, to suit your needs and your style.

5. You have the option of buying to rent which enables a Homeowner to generate income from
renting out the property. This income can be put towards the home loan.

6. Being a Homeowner who ensures repayments are made on time can improve your credit profile.
Not only will you have a large investment to your name, but paying your monthly bond
repayments on time increases your credit score.

7. You have the option to refinance your bond amount should you wish to withdraw a large
amount of money to pay for major purchases.

8. There is an opportunity to save money in the long term as there are possible tax deductions
related to income-generating properties.

Disadvantages of buying a home

1. Being a Homeowner comes with huge financial responsibility including bond repayments and
regular house maintenance.
 2. There are additional costs to homeownership and these usually include rates, taxes, insurance,
and maintenance for which the Homeowner is responsible.

3. A Homeowner runs the risk of not making any profit through resale. This is often caused by
economic factors such as a recession or high interest rates, or simply through a particular
location becoming less desirable.

4. A Homeowner has less mobility when it comes to being able to move home than a Tenant who
rents on a short-term basis. A Tenant can leave a property after fulfilling the notice period,
which is usually one month. However, a Homeowner is likely to be dependent on selling their
home before being able to buy a new one, and therefore it might take longer to be able to move
homes once the decision has been made to do so.

Advantages of renting a home

1. Renting a property allows more flexibility than owning a home. This is ideal for those who could
be faced with sudden changes such as a job relocation. Renting requires no long-term
commitment from a Tenant, and is the best option if you don’t intend on staying in one place for
a long time.

2. As a Tenant, there is the possibility of living in an area in which you could not afford to buy.

3. Moving out is easier for a Tenant than a Homeowner as there is no stress of finding someone to
take over the lease, or finding a Buyer to purchase the property as this is the responsibility of
the Homeowner or Landlord.

4. The only insurance required by a Tenant will be to cover the contents of the home, while all
maintenance work on the property is for the Homeowner’s account, as is homeowners
insurance.

5. After paying rent, a Tenant may have additional money which they can use to invest elsewhere,
whether it is saving towards buying a house or investing in the stock market, and need not
worry about putting additional funds into a home loan.

Disadvantages of renting a home

1. A Tenant is bound by the rules of the lease agreement, which can impact the freedom to use or
renovate the property.

2. You cannot make changes to a rented property without the consent of the Homeowner.

3. When renting, you will often have to deal with a Rental Agent who will then be the liaison
between you and the Homeowner. This can result in issues taking longer to resolve since there
is a 3rd party involved.

4. Renting offers no wealth creation or return on investment since the property will never legally
belong to the Tenant, and instead, the Tenant is paying towards the Homeowner’s home loan.
 5. When renting a property, you will have no control over annual rental fluctuations which are
directly affected by inflation.

6. There is no guarantee that a lease will be renewed when it expires.

l) Basic housing Norms for EWS and LIG

Ans.
UNIT I

2. Discuss the housing situation in India. What should be the Govt. role in reducing the demand and
supply gap in housing in India?

Ans. India has been one of the fastest growing economies across the globe, and this unprecedented
development has come with its own set of challenges.

o Fast-paced industrialization in the last one decade has led to unrelenting rural-urban migration,
and metro cities swarming with population, thus pressurizing the available housing stock.
o Skyrocketing property and land prices coerced majority of the migrants to occupy slums and
squatter settlements.
o A mismatch in demand and supply of both quantity and quality of housing soon derailed the real
estate industry off its growth trajectory.
o The sector landed into a paradoxical state where houses remained vacant, yet majority citizens
inhabited land typified by poor quality housing stock and congestion.
o The crisis reached a point where the housing shortage was estimated at a whopping 20 million
households in 2012.
o Out of those living in obsolescence, close to 90 percent belong to the Economically Weaker
Sections (EWS) who were in dire need of a new house, or even a house.
o The Lower Income Segments (LIG) and Middle-Income Segments (MIG) constituted the
remaining households who lacked livable ‘affordable’ housing spaces in urban centers.

Source: Report of the Technical Urban Group (TG-12) on Urban Housing Shortage 2012-17; Ministry of
Housing and Urban Poverty Alleviation, September 2012

The Concentration of housing shortage –

While the entire country reeled under a housing deficit with both developed and un-developed states
exhibiting the trend, nearly three fourth share of the shortage was concentrated across 10 states.
As per 2012 estimates, Uttar Pradesh topped the charts with more than over three million households
living in poor housing conditions.
Maharashtra followed with a housing shortfall of 1.97 million.
Source: Report of the Technical Urban Group (TG-12) on Urban Housing Shortage 2012-17; Ministry of
Housing and Urban Poverty Alleviation, September 2012

Affordable housing – The need of the hour

The housing deficit in urban areas is primarily driven by the EWS, LIG and MIG segments.
With developers mainly focusing on luxury and high-end housing, a majority of homes constructed in
the cities are beyond the purchasing power of these income segments.
Exorbitant construction and land costs, stringent building bye-laws, prolonged approval processes and
unfavorable banking policies made the development of low-cost housing an unprofitable business
venture for private players, restricting the onus of providing affordable homes to the government.

Comprehending affordable housing as the need of the hour, the government has acted as a facilitator to
make the segment an alluring venture for private developers and introduced several incentives and
schemes over the years.
One such ambitious project taken over by the government in June 2015 is Pradhan Mantri Awas
Yojana (PMAY) or Housing for All.
Through this, the government envisages delivering every household a habitable shelter with water
facility, sanitation and electricity supply by 2022.
The project was kick-started with an aim to create 40 million homes in rural India and 20 million in urban
India.

In the last four years, consistent efforts towards making PMAY a success have paid off with the country
reporting a dip in the housing deficit to 10 million.
With another three years in hand, the government aims to bridge the remaining gap and provide a
home to every Indian
REFERENCE – https://www.99acres.com/articles/housing-shortage-in-india-and-pmay-affordable-
housing-scheme.html

Cumulative numbers of demand and supply for housing in eight major cities of India from 2016 to
2020(in 1,000s)

From 2016 to 2020, the cumulative demand for residential housing among the low income group of the
eight biggest cities of India was 1.98 million housing units, whereas the supply was only 25,000 units.
Thereby, there existed a significant gap between demand and supply in this income group. The gap is
much smaller in the middle and high income groups. In the latter group, a demand of 717,000 units
faces a supply of 351,000 units.

REFERENCE – https://www.statista.com/statistics/1211868/india-housing-demand-and-supply-in-
major-
cities/#:~:text=From%202016%20to%202020%2C%20the,supply%20was%20only%2025%2C000%20uni
ts.&text=In%20the%20latter%20group%2C%20a,a%20supply%20of%20351%2C000%20units.
3. What are the various housing typologies that have emerged in India over the centuries? Which two
typologies define the character of Indian cities?

Ans.

4. What do you understand by Slums? Write briefly about the Origin and Growth of slums in Urban
India.

Ans. Urban slums are settlements, neighborhoods, or city regions that cannot provide the basic living
conditions necessary for its inhabitants, or slum dwellers, to live in a safe and healthy environment.

The United Nations Human Settlements Programme (UN-HABITAT) defines a slum settlement as a
household that cannot provide one of the following basic living characteristics:

• Durable housing of a permanent nature that protects against extreme climate conditions.
• Sufficient living space, which means no more than three people sharing the same room.
• Easy access to safe water in sufficient amounts at an affordable price.
• Access to adequate sanitation in the form of a private or public toilet shared by a reasonable
number of people.
• Security of tenure that prevents forced evictions.

This proportion is even higher in metropolitan cities like Kolkata, Mumbai, etc. First question which
arises here is that how slums developed, what are the requirements for their development.

There are varieties of factors which helps in the formation of slums.

Growth rate of population (Urbanization)

First of all the growth rate of Indian population is very high and this growth rate is much higher in the
urban areas because of the migration of large number of people from rural to urban. Due to the poverty,
unemployment, lack of other amenities and more importantly to elevate their status, people migrate to
urban areas, facilities in the cities are honey trap for the rural. The growth rate of civic amenities in the
urban areas does not keep pace with the growing population. This difference in the growth rate
provides space for the development of the slums.

Poor housing planning

Lack of affordable low cost housing and poor planning by government encourages the supply side of
slums. Insufficient financial resources and lack of coordination in government bureaucracy are two main
causes of poor housing planning.
Slow development of Villages

Villages in India are not Developed even on basic requirement level, and even today people face the
scarcity of water, electricity and many more basic amenities. This lack of facilities in rural areas forces
people to migrate to the urban areas, which increases pressure on urban population. Though this is not
much pronounced reason for genesis of slums but it still is one of them.

Vote politics

Vote politics also support the slums. Removal of slums brings conflicts of interest of politician. Slum
population forms a good amount of easy vote bank and politics want them to remain as they are,
because their upliftment and education will hurt their vote bank.

High house Rents In Cities

Poor peoples, most of which coming from rural areas, are not able to pay high rent of houses in the
towns. Hence wherever they find a land, public or private, they start living there in temporary hutments,
as the time progress, more and more people join them and that area soon develops into the slum.

Refugees

Some of the slum areas in India are also inhabited by the refugees. Once an area is marked as slum it
started growing because of increasing population pressure in cities.

5. Define Slums. What are the Problems related to growth of slums in urban India. Write briefly about
the two pronged approach/solution of the Government for handling the problem.

Ans. Slum is a contiguous settlement where the inhabitants are characterized as having inadequate
housing and basic services. Cities Alliance Action Plan describes slums as neglected parts of cities where
housing and living conditions are appallingly poor.

▪ Census of India 2011 explained slums as residential areas where dwellings are unfit for human
habitation by reasons of dilapidation, overcrowding, faulty arrangements and design of such
buildings, narrowness or faulty arrangement of street, lack of ventilation, light, or sanitation
facilities or any combination of these factors which are detrimental to the safety and health

▪ The slum is an inevitable part of modern urbanization and the urban poor are active agents
serving the non-slum dwellers and contribute to economic growth

Slums in India- Statistics:

▪ Out of 4,041 Statutory Towns in Census 2011 Slums reported from 2,543 Towns (63%)
 ▪ Largest number of slums reported from Maharashtra (21,359)

▪ People who are living in slums increased from 52 million in 2001 to 65.5 million 2011

Factors responsible for growth of slums:

1. Demand- supply of Housing: The gap between growing demand for affordable urban
housing and insufficient supply has encouraged the formation of slums. Whenever the
demand surplus is not met by formal sectors, this gap is typically filled by an informal
dwelling such as a slum

2. Limited access to financial resources: slum dwellers typically inhabit marginal locations
such as dumping grounds mainly due to the low purchasing power of slum dwellers in
formal land markets when compared with high-income groups. Further, the urban poor
lack the access to formal financial resources to help them purchase new homes or
maintain a new life in a new housing unit.

3. Rural to Urban Migration: Rural to urban migration is one of the primary drivers of
growth of slums in Indian cities. Urban centers which are not equipped to support
additional population, fail to cope up with high influx of people which ultimately causes
several problems such as housing shortages, unemployment, and development of slums.

4. Poor Urban governance: A major factor for growth of slums use of rigid, often outdated
urban planning regulations, which are typically bypassed by slum dwellers to meet their
housing needs. Another issue is the failure of governments to incorporate slum dwellers
as part of the overall planning process. This is often due to the inability of many
governments to keep pace with urbanization because of ill-designed policies, lack of
resources and corruption.
Steps taken:

1. National Slum Development Programme (NSDP): Initiated in 1996, NSDP provided both
loans and subsidies to states for slum rehabilitation projects on the basis of their urban
slum population.

2. Valmiki Ambedkar Malina Basti Awas Yojana (VAMBAY): Introduced in 2001, it focused
on shelter for the urban poor, with 20% of total allocation for community sanitation
facilities under the Nirmal Bharat Abhiyan (NBA) program

3. Basic Services to the Urban Poor (BSUP): BSUP was an important component of
Jawaharlal Nehru National Urban Renewal Mission (JNNURM). BSUP aimed to provide
basic services to urban poor in 63 of the largest cities in India by population

4. Integrated Housing & Slum Development Programme (IHSDP): Integrated Housing &
Slum Development Programme (IHSDP) was launched by GoI by merging the schemes of
NSDP and VAMBAY. The objective of the scheme is to provide adequate Shelter and basic
infrastructure facilities to the slum dwellers in urban areas.

5. Interest Subsidy Scheme for Housing the Urban Poor (ISHUP): The Scheme envisages the
provision of interest subsidy to economically weak section and Low income groups to
enable them to buy or construct houses.

6. Rajiv Awas Yojana (RAY): Launched in 2013, the scheme focused on:
 o Bringing existing slums within the formal system and enabling them to avail of the same level of
basic amenities as the rest of the town;

o Redressing the failures of the formal system that lie behind the creation of slums; and

o Tackling the shortages of urban land and housing that keep shelter out of reach of the urban
poor.

7. Pradhan Mantri Awas Yojana- “Housing for All (Urban): Launched in 2015, the scheme
seeks to provide central assistance to implementing agencies through States and UTs for
providing houses to all beneficiaries by 2022. It incorporates the following:

o “In-situ” slum rehabilitation with participation of private developers using land as a resource.
This approach aims to leverage the locked potential of land under slums to provide houses to
the eligible slum dwellers bringing them into the formal urban settlement.

o Promotion of Affordable Housing for weaker section through credit linked subsidy

o Affordable Housing in Partnership with Public & Private Sectors

o Subsidy for beneficiary-led individual house construction/enhancement

6. Discuss the role and responsibilities of Public and private sectors in providing affordable housing.

Ans. Housing for low income group

Role of public sector –

1. During the First Five Year Plan (1951–56) government-directed various programs such as the
subsidized Housing Scheme for Industrial Workers (1952), Housing for Low Income Group
(1954), and Housing Scheme for Plantation Workers (1956). The result of this indicated that the
poor benefited the least from this policy.
2. During the Second Five Year Plan (1956–61), the government began to pursue the policy of slum
clearance and rehabilitation of housing. The slum clearance scheme was self-defeating in the
sense that it did not take into consideration the situation of acute shortage of housing stock. On
the contrary, it sought to demolish existing stock.

National Housing Policy 1988

1. To promote the interest of higher and middle income groups. Draft National Housing Policy
2. To link shelter provision with economic improvement of the poor. National Housing Policy 1994
3. To provide affordable housing for all and strengthen the enabling strategies.
Role of private sector –

1. The total public-sector contribution to the housing stock is no more than 16% for the country as
a whole, while the majority of the housing stock (84%) is provided through the efforts of the
formal and informal private sector.
2. The formal sector includes direct budgetary allocations and also net financial assistance through
financial agencies like the Housing Development and Finance Corporation (HDFC), the Life
Insurance Corporation (LIC), the Unit Trust of India (UTI), commercial banks, provident funds,
etc.
3. The informal sector includes households themselves as well as public- and private-sector
employers who extend housing loans to their employees (Government of India, 1992).
4. Another form of informal development is “farmers’ land subdivisions”, where land in urban
development zones is owned and cultivated by farmers. The farmers themselves subdivide the
land without the intervention of middlemen.
5. A substantial proportion of the urban population in India is housed in the informal housing,
ranging from 33% in Delhi to over 52% in Mumbai.
6. The share of the formal private sector in this investment is only about 12%. Indeed, housing
provided by the formal private sector is beyond the reach of the poor. Most of the housing for
the poor is provided by the informal private sector.
7. However, for the poor, most of the housing is provided by the illegal informal private sector. The
illegal informal sector manages to bring the cost of housing within the affordable limits of the
poor, as land is either acquired free of cost or at low cost because of undesirable site conditions.

Role of housing cooperatives –

1. There are three types of cooperative societies in India:

1. Building Cooperative Societies (BCS),
2. Housing Finance Cooperative Societies, and
3. Tenure Cooperative Housing Societies.
2. In New Delhi, they are known as Cooperative Group Housing Societies; they undertake the
planning, construction, and management of housing.
3. In Mumbai, there are Tenant Ownership Housing Societies (where land is held by the
cooperative and members lease the unit from the cooperative).
4. In Chennai, housing cooperatives are mainly housing finance cooperatives that serve middle-
and, to some extent, low-income households.

Role of public and private financial institutions –

1. From the 1950s onward, the Indian financial market was regulated by government bodies, the
Government of India did not consider housing as a priority sector; housing was seen as a social
welfare sector rather than an economic sector.
 2. In the Seventh Five Year Plan, it was proposed that HUDCO should largely concentrate on EWS
and LIG housing and not on MIG and HIG housing.
3. In 1977, the Housing Development and Finance Corporation (HDFC) entered the Indian finance
market. Its housing program caters mainly to middle- and high-income groups.
4. The guidelines for lending were liberalized by the commercial banks in 1988 and the amounts of
admissible loans were enhanced. The beneficiaries’ margin was reduced and the interest rate
was pushed down for small loans while the period of repayment was increased from 10 years to
15 years.
5. In 1988 Government of India set up the National Housing Bank (NHB) to mobilize resources for
the housing sector, particularly to help the low- income groups and promote housing finance
institutions at the regional and local level.

7. a) What is the importance of housing surveys? What agencies are involved in the conducting
housing surveys in India?

Ans. Household surveys are one of the most important sources of social and demographic statistics.
While housing censuses are also a key source of such statistics, they are only conducted every 10 to 15
years.
Household sample surveys — which can investigate almost any population-based subject — are
therefore a powerful alternative, becoming one of the most flexible sources of data on social
phenomena in the last few decades.

A household survey and censuses monitor two different sets of information.

The household survey provides a more exhaustive collection of data on households, while population
censuses offer comprehensive information on the population, age, sex, and education, etc.

Household surveys collect comprehensive and diverse socio-demographic data pertaining to conditions
under which people live — their welfare, demographic characteristics, and cultural factors that influence
behavior, as well as social and economic change.

As online household surveys have become more accessible, with respondents participating at their
leisure, we’re seeing a dramatic reduction in the overall cost of conducting a survey, as well as an
increase in useful, accurate data that’s easy to differentiate and categorize.

Importance of a household survey –

These surveys help us understand the basic needs and the daily challenges faced by every household in
the populace. Earlier these surveys were conducted manually, the field scientists would go door to door
— record data, study, observe, and gain experience from the households being surveyed.
These surveys were conducted mainly to track the living standards, demographics and understand the
socio-economic aspect of each household in a specific area.
Census Of India

The Indian Census is the largest single source of a variety of statistical information on different
characteristics of the people of India. he responsibility of conducting the decennial Census rests with the
Office of the Registrar General and Census Commissioner, India under Ministry of Home Affairs,
Government of India.

b) What are the various types of housing data that the national and state level housing surveys
provide us with.

Ans. DATA ITEM COLLECTED IN CENSUS – House listing Operations (YEAR 2001)

1. Use of the census houses

2. Condition of census houses used as residence
3. Predominant material of the roof, wall and floor or the census houses
4. Type of structure of census houses
5. Number of dwelling rooms
6. Ownership status of the house
7. Number of married couples and whether they have independent sleeping rooms
8. Source of drinking water (e.g., Tap; Hand pump; Tube well; Well; Tank; Pond River;
canal; Spring; Other) and its location
9. Source of lighting ( e.g., Electricity; kerosene; Solar energy; Other oil, Any other; No lighting)
10. Availability of bathroom, type of latrine and type of drainage for waste water
11. Availability of separate kitchen and type of fuel used for cooing (e.g., Firewood; Crop residue;
Cow dung cake; Coal, Lignite, Charcoal; kerosene; LPG; Electricity; Biogas; Other)
12. Availing of banking services and availability of the specified assets (e.g., Radio, Transistor;
Television; Bicycle; Motor Cycle, Moped; Car, Jeep, Van; None of these

8. What agencies are involved in the conducting housing surveys in India? What are the methods for
conducting large scale surveys across the population?

Ans.
UNIT II

9. State the aim and objectives of Housing and Habitat Policy, 2007. Discuss the role of all
stakeholders for achieving the goal of providing shelter for all.

Ans. In order to leverage the adequate resources for housing the poor and to achieve the objective of
providing affordable shelter to all, National Urban Housing & Habitat Policy was reframed by the
Government of India in the year 2007. Policy aimed at promoting sustainable development of habitat in
the country besides promoting various types of public-private partnerships for realizing the goal of
affordable housing for all.

National Urban Housing & Habitat Policy defines the following agenda to ensure mobilization of
adequate funds for housing the urban poor in terms of:

i) Promoting larger flow of funds from governmental and private sources by designing
innovative financial instruments.
ii) Designing suitable fiscal concessions to ensure that concession are correctly targeted
and utilized.
iii) Removing legal barriers to facilitate larger access to finance.
iv) Shifting from demand driven approach and subsidy based housing schemes to cost
recovery-cum-subsidy schemes to recycle the available resources.
v) Encouraging Foreign Direct Investment.
vi) Developing convergence between urban sector initiative and financial sector reforms.
vii) Reassessing the strength of the banks and Housing Finance Institutions (HFI) to make
them more inclusive to EWS & LIG beneficiaries and intensity their coverage in low
income neighborhoods.
viii) Setting up of National Shelter Fund under the control of National Housing Bank to
provide larger allocations to EWS/LIG categories.
ix) Making larger allocations by HUDCO for encouraging EWS/LIG housing

10. How did the 11th Five year plan restructure the role of government in field of housing and
channelize it towards the social sector?

Ans.

11. Explain the Institutional framework for Housing Finance in India. What is the approach of these
institutions for providing finance to public for meeting housing need?

Ans. Housing was considered more as a family affair and private investment. The investment required,
which was limited and met either from family saving or borrowings from informal sources. With the
rapid growth of urbanization and improved income as a result of economic development since
Independence, the government recognized the critical importance of housing finance and need for
development of multi-institutional network to meeting the growing investment needs of the housing
sector.

REGULATORY FRAMEWORK –

There are two key regulatory bodies for the Indian Housing Finance system are Reserve Bank of India
(RBI) and National Housing Bank (NHB) apart from administration (Central/State).

While RBI regulate these commercial Banks, NHB oversees the accommodation finance companies or
organizations, and is a ancillary of RBI.

The cooperative sector institutions are synchronized by the concerned State Governments and also
supervised by NABARD.

The commercial banks as well Housing Finance Companies are also regulated by the capital market
regulator, SEBI, in case they are listed companies.

In India, the lending policies adopted by both the public sector banks and private sector banks are
mainly governed by the RBI guidelines on housing finance. The broad policy framework provided by the
RBI for housing finance has the following basic elements :

1. Banks should lend at least 3 percent of their incremental deposits for housing. Banks' shares of
the housing finance allocation should be computed at 3.0 percent of their incremental deposits
as on the last reporting Friday of March of the financial year over the corresponding figure of
previous financial year. This was the minimum housing finance allocation and the banks are free
to exceed this level, having regard to their resource position.
2. Housing loans up to the ceiling of Rs.15 lakh irrespective of location and loans granted for
repairs to damaged houses up to Rs.1 lakh in rural and semi-urban areas and up to Rs.2 lakh in
urban areas are eligible for classifying under the category of priority sector lending of banks.
3. Banks can deploy their funds under the housing finance allocation in any of the four categories :
- Direct finance to individuals or group of individuals including cooperative housing
societies for construction or purchase of new houses / flats or renovation / expansion of
existing houses.
- Indirect finance to housing finance institutions, housing boards or any other public
housing agencies and private builders for augmenting supply of housing stocks.
- Investments in bonds issued by NHB / HUDCO for financing of housing.
- Banks can consider channelizing housing finance through regional rural banks, village co-
operatives and voluntary agencies.
 4. Indirect housing finance should be provided primarily for augmenting the supply of land and
constructed units with time bound program not exceeding 3 years. It should be channeled by
way of term loans to housing finance institutions and housing boards / agencies.

12. What is Institutional framework for Housing Delivery in India? How do these institutions facilitate
the delivery of housing to various sections of the society?

Ans.

13. Enlist the main Factors that affect the Cost of Housing. How can they help to deliver low cost
housing?

Ans. The housing market is influenced by the state of the economy, interest rates, real income and
changes in the size of the population. As well as these demand-side factors, house prices will be
determined by available supply. With periods of rising demand and limited supply, we will see rising
house prices, rising rents and increased risk of homelessness.

1. Growth in the Economy:

Housing demand depends on revenue. With higher economic growth and growing wages,
people can spend more on housing, improving application and boosting prices. In reality,
housing demand is often seen as elastic in terms of income , leading to an increase in revenues
for households. In a recession, reduced sales will also stop people from buying, and people who
are losing their jobs will fall behind their mortgage payments and end up in their homes
repossessed.

2. Unemployment:

The second important point that comes under the economic factors affecting housing market is
related to economic growth. Very few people will have possible to afford a house as
unemployment rises. But even fear of unemployment can stop people from entering the real
estate market.

3. Customer Trust:

Confidence is an essential part when people are to take the risk of taking out a mortgage.
Mainly house market expectations are significant. When people fear house prices will decrease,
people will postpone purchasing.
4. Mortgage Availability:

Most banks are keen to lend mortgages during the boom years of 1996-2006. It enabled people
to borrow large amounts of revenue (for example, five times the income). Additionally, minimal
deposits that are 100% of mortgages are provided by banks. The flexibility of hypothecating
meant that the housing demand grew as more people could buy now. Yet banks and
construction companies have had trouble raising money to finance the financial markets since
the 2007 credit crunch. Therefore, their borrowing conditions for a larger house purchase
deposit have been improved. The supply of loans has been limited, and demand fell. Get
some property documents required for home loan.

5. Offering:

A supply shortage drives prices up. Over-supply could lead to a fall in prices.

Demand and Supply

This one’s a no-brainer. We all know how the economic forces of demand and supply drive
prices – high demand with low supply equals high prices whereas low demand with high
supply equals low prices. While we usually speak of it in terms of commodities, it holds good
for real estate as well.

Sustained job growth

One important price driver in real estate is sustained job growth. Locations where plenty of
offices from diverse industries are established will have surging prices. For instance, the
booming IT job market in the Outer Ring Road (ORR) area in Bangalore continues to boost
both the commercial and residential property markets in the region. The more varied the job
opportunities, the more resilient it makes the real estate market in that area.

Office space demand is often considered an indicator of the job market. The higher the office
space taken up in a region, the stronger the residential and commercial market will be.

Infrastructural development

Infrastructure is a major consideration for home seekers. A location that has reasonably good
infrastructure has a higher perceived value to a buyer. Accordingly, the property prices also
increase. Facilities such as accessible road and rail transport are known to increase real estate
prices significantly. For instance, when metro rail projects are announced, the localities along
the route benefit immensely.
 Social infrastructure such as proximity to schools, hospitals and retail stores also tends to
increase property rates.

Home loan rates

Prevailing home loan rates have an interesting effect on property prices via demand. When
interest rates for home loans are high, it reduces the demand for property since it makes
borrowers reluctant to spend extra money over the high interest rate. Similarly, when loan
interest rates are low, buyers boost the demand for real estate. Demand then has a bearing
on the price that property sellers quote.

Zoning regulations

It has also been noticed that certain regulatory factors such as zoning regulations can also
have an impact on real estate prices. If zoning regulations restrict the amount of construction
in an area, the overall allure of properties there rise because of open spaces, greenery and so
on.

14. What are the Basic Housing Norms and Standards for EWS, LIG and MIG, as laid out by the
government?

Ans.