Sweet homes

Housing stimulus is properly ambitious. But it will need unprecedented oversight

Published: February 16, 2009 12:43:45 am

India finds itself in an unprecedented situation. The world is slowing down; and this time it is taking a hitherto closed country with it. The benefits that India has drawn from participation in the global economy are real,huge and undeniable; now its government must use those benefits to ensure that this slowdown doesn’t disrupt India’s long-term growth path. It is a time for big ideas,for sums considered staggeringly large. And a current proposal shows that the Central government is not afraid to think big.

A scheme is being considered which,in terms of expenditure,dwarfs even the extraordinary sums being spent under the National Rural Employment Guarantee Act (NREGA); the ministry of housing and urban poverty alleviation has suggested Rs 80,000 crore for creating affordable housing in urban centres across India while simultaneously providing additional impetus to heavy industry such as steel and cement — and,of course,employment to manual labour. In principle,there is little wrong with this idea. It might be useful to spell out what makes sense about it. It is on the right side of history in terms of attempting to aid and guide India’s inevitable urbanisation; it should be the likely cause of re-invigorating thinking about how to create affordable low-tech housing,and how to integrate such housing into the geographical networks which the houses’ inhabitants will need to access for employment; and it could ensure that the fragile real estate sector is kept buoyant and grounded during these,the worst of times.

Those words of hope being done,the point must be made that implementation of any scheme of this nature will require the utmost vigilance,care and caution. Problems with the NREGA have highlighted that even when the sums in question — a labourer’s daily minimum wage,say — are “small” and auditing is relatively strict,creative practices can be invented to skim off vast sums. In a case where individual payments will be several thousand orders of magnitude larger,that much more care will be required in designing the mechanisms of oversight and transparency. Identification of BPL households will,of course,be problematic; but even more,the government will need to ensure that allotment of land is done fairly and cleanly. If that is not done,not only will the scheme fail,but beliefs might take hold that “big builders” are being granted preferment at the price of the “common man”. That eventuality would extract a massive political price.

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