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The Big Picture – Housing for all: Viability & Roadblocks

The Big Picture – Housing for all: Viability & Roadblocks



One of the most enduring problems faced in this country has been that of housing shortage. It is starkly evident in the fact that about 100 million people live in slums in India. With increasing urbanization this problem has been only growing exponentially. In urban areas, India faces a shortage of over 20 million houses at present. Reports indicate that by 2031 about 600 million people live in urban areas, about 200 million more than at present. The union cabinet has approved the Housing for All schemes by 2022 with a slew of measures aimed at helping people to build houses through financing apart from redevelopment of slums among other things. This scheme was announced in the budget this year.

The programme is a key promise in the Bharatiya Janata Party’s manifesto for the Lok Sabha election in 2014 — a “pucca” house for every family by the 75th year of Independence. Central grant of an average Rs. 1 lakh would be available for a house under the scheme. Even the State governments can exercise flexibility in spending the grant for any slum rehabilitation project using land as a resource for providing houses to slum-dwellers. An interest subsidy of 6.5% on housing loans availed up to a tenure of 15 years will be provided to economically weaker sections/lower income group (EWS/LIG) categories. It is a Centrally sponsored scheme.

The fundamental problem in not achieving housing for all is not really shortage of resources from government side. It is more of a planning and regulatory issue. People are forced to live in the slums, which are in the heart of cities, more for a economic, safety and day to day commutation needs. This is the major reason for the houses built by the government outside the cities laying vacant. 90% of India’s housing problem is not of absolute homelessness. majority of people are living in houses that are not fit for human habitation. People are forced to live in the illegal settlements because of the commutation problem in urban areas. They do not have access for basic facilities. Hence, legal recognition of their existence is necessary.

Various governments at the centre have been taking a slew of regulatory reforms such as allowing foreign direct investments, improving access to credit by households, providing tax incentives on housing loans. This has propelled private sector participation in urban housing development. However, it has largely resulted in the development of Middle Income Group (MIG) and High Income Group (HIG) houses, leading to significant shortage of EWS/LIG or affordable houses. Economically weaker sections/lower income group (EWS/LIG) categories houses constitute more than 95% of the housing shortage in 2012. The development of urban affordable houses has been limited due to several structural issues making it unfeasible business proposition for the private sector.

Major structural issues restricting private sector participation in urban affordable housing are:

  • Rapid urban planning process.
  • Lengthy and complex Approval procedure.
  • High cost of development.
  • Restrictive development norms.
  • Cost overrun and project delays.


Unless the above-mentioned issues are addressed, it is difficult to achieve the stated objectives of the Housing for all by 2022 scheme.