To meet the acute shortage of affordable housing in urban India,the government is mulling over a proposal to set up an inter-ministerial group on Housing and the Economy to fast-track the decision-making process.
The housing and poverty alleviation ministry is also considering formation of a dedicated institution for this task,in partnership with the private sector. The institution,proposal stated,should be well funded,partly by government but mostly in a manner that enables the use of market-oriented funding,to ensure sustainability of the housing efforts over a long-term period.
For funding housing activity,apart from budgetary support,it is also looking at a replenishable pool of funds and an incentive structure to encourage investment for this housing segment. The proposal emanates from the recommendations made by Deepak Parekh-led task force on Affordable Housing for All to the housing and poverty alleviation ministry.
The panel has blamed high prices of housing in India as a serious impediment to ownership. One of the important trends in housing finance is the widening gap between incomes and housing prices,as the latter have risen sharply in relation to incomes, it noted. Around 30 per cent of Indias population lives in urban India which forms 2.3 per cent of countrys total geographical area.
The report has pointed out the shortage of housing finance and the vulnerability of lending institutions to various risks. It has also recommended that financial institutions lending to the urban poor,employed in the informal sector,should be allowed to take deposits. Offering full scale banking services to the poor is a critical component of increasing access to financial products for the poor, the report said.
The government should also pay attention to the creation of a healthy rental housing market,up-gradation of existing slums with subsidies which will cost 30-35 per cent of cost of new construction,the report said.