Despite all the efforts of the government and developers, there are challenges that act as hindrances in reaching the target of 'Housing For All by 2022'.
After a phenomenal 2019 in terms of announcements and measures taken to streamline the real estate sector and to provide liquidity solutions to stuck projects, it is expected that the government will take last year’s thought and action forward to come up with the announcements that can be implemented in the short term. In fact, the government has set the target of ‘Housing for All by 2022’ and affordable housing can help meet it.
Multiple policies that favor affordable housing were announced by the government. CLSS (offering interest subsidy of up to Rs 2.67 lakh) has proved to be a major demand booster, aided by lowering interest rates. Other changes that provided a much-needed push to affordable housing were raising the limit of home cost, and carpet area to 30 sq mts for metros and 60 sq mts for non-metros, bringing mid-income housing under the ambit of PMAY, etc.
The various tax benefits including reduction in GST on affordable homes to 1%, under construction homes to 5% with zero GST on ready homes and hiking exemption limit of interest on home loans to Rs 3.5 lakh provided further impetus to affordable and mid-income housing. Major policy overhauls gave importance to all round development such as GST, Insolvency & Bankruptcy Code, Benami Transactions (Prohibition) Act, 100 Smart Cities, Housing for All by 2022, Make in India, AMRUT Cities etc.
Affordable housing has the maximum demand and developers are contributing their level best to come up with projects that cater to this need. In absolute terms, there is no shortfall of affordable housing especially in Delhi NCR. Developers are coming up with the units according to the demand and thus supply is in sync with the demand.
Despite all the efforts of the government and developers, there are challenges that act as hindrances in reaching the target of ‘Housing For All by 2022’. First, land is not available at locations that are in high demand. Buyers of the affordable segment like to have their homes in places that are accessible and not far from their workplaces, but most of the affordable houses are being developed on the outskirts. Second is the rising cost of raw materials which makes it difficult to come up with homes that can fit the budget of the affordable segment. Raw materials for affordable housing should be subsidized to ensure the faster delivery of quality project within the stipulated time. Third, frequent changes in policy matters put brakes on the development and it has to be taken into account. The policy should be clear from the word go so that the target of 2022 can be met fast.
A conducive environment has to be created where every developer should come out with contribution towards the goal. The sector needs support if the government wants every Indian to have a house.
(By Parveen Aggarwal, Founder & Chairman, Signature Sattva)