Provision of affordable housing is one of the most formidable challenges that India currently faces. The 11th Five Year Plan estimates the urban housing shortage at the commencement of Plan period at 24.7 million units, with 99% of this shortage pertaining to the Economically Weaker Sections (EWS) and Lower Income Groups (LIG). Taking these into account, Ministry of Housing & Urban Poverty Alleviation had set up a High Level Task Force on the 15th January, 2008 to look into the various aspects of providing Affordable Housing for All under the Chairmanship of Mr. Deepak Parekh, Chairman – HDFC Ltd. to submit a report on the following issues:-
1. Developing innovative financial instruments for bringing flexibility in the housing market and examining various fiscal and spatial incentives for increasing supply of houses to economically weaker sections and Low Income families.
2. Affordability of all categories including the Economically Weaker Sections (EWS), Low Income Groups (LIG) and Middle Income Groups (
3. Examining the framework of Regional Planning and Master Planning with a view to enhancing the supply of developed land and recommending legislative measures for accelerating the supply of housing units for the urban poor.
4. Recommending measures for promotion of low cost building technologies;
5. Suggesting steps for enhancing the supply of rental housing;
6. Assisting the Ministry in devising an integrated strategy for in-situ slum upgradation with a view to improving the quality of habitat as well as providing the urban poor with places to work and sell; and
7. Advising the Ministry about various types of programme initiatives with the aim of achieving the goal of “Affordable Housing for All”.
Shri Deepak Parekh, Chairman of the Task Force presented the report to Kumari Selja, Minister of State (Independent Charge) for Housing & Urban Poverty Alleviation today. A presentation on the recommendations was made before Minister, which was attended by Ms. Kiran Dhingra, Secretary, Ministry of Housing & Urban Poverty Alleviation, Shri S.K. Singh, Joint Secretary (Housing), Dr. P.K. Mohanty, Mission Director (JNNURM) and Prof. OP Mathur.
The Minister informed that Ministry will examine the recommendations made by the Task Force and take a view in the matter.
Recommendations of the Task Force
The Task Force has strongly recommended the need for ‘Affordable Housing’ and mentioned that delay in addressing the affordable housing problem would seriously affect India’s economic growth and poverty reduction strategies. The Task Force notes that housing is central to economic growth and has multiplier effects on employment, poverty reduction etc. The Task Force estimates that alleviating the urban housing shortage could potentially raise the rate of growth of
Some of the specific recommendation of the Task Force are:-
Affordable Housing
· “Affordable Housing” be put at the centre of public policy.
· Any attempt to fix a definition of affordable housing for a country as large and diverse as
has suggested the following parameters for the purpose
The Task Force visualises the size of the household as five members.
· Government to may undertake a separate exercise to estimate the number of households on the basis of above.
· Data on housing starts and completions at the national and state level be made readily available and may be collected through an institutional structure.
Land for Affordable Housing
· Additional lands may be brought into urban usage on a regular basis by:
· Simplifying procedures and processes for land acquisition and conversion of agricultural lands for urban use.
· Reviewing the processes of Master Planning and effecting such changes as are necessary for making a proper assessment of land requirements and allocation of such lands for different uses, including lands for affordable housing.
· Treat affordable housing as a ‘public purpose.’
· Upward revision in the FAR/FSI, across cities of different sizes commensurate with investment in infrastructure that it will necessitate.
· Develop detailed critical space plans, which incorporate infrastructure intensive cluster development.
· Impose an impact fee on those benefiting from higher FAR/FSI.
· In-situ development on public lands for addressing affordable housing issues in partnership with the Government.
· ‘Security of tenure’ be recognised as an important and integral tool for relieving pressures on the housing market. This may undertaken through regularisation of settlements, community or cooperative ownership, security via lease, use rights, which enables in-situ development to take place.
· The recommendations on land related issues i.e. bringing in additional lands, upward revision in the FAR/FSI and in-situ development have to be implemented in an integrated manner.
· Improve the speed of transactions through cadastrals, computerised land records and application of e-governance to land transactions.
· Commission a professional study, to examine the range of issues covering urban land and recommend a comprehensive, long-term urban land policy. Given the environmental concerns, “sustainable” methodologies need to be developed.
· Need to foster an environment that would make rental housing for EWS/LIG categories a worthwhile activity to invest in.
Fiscal and Financial Framework
· Increase JNNURM funds for affordable housing by 100 percent and a part of the funds be used for direct provisioning of housing for poor urban households.
· A part of the funds be also used as supplements for in-situ development to be routed through the Non-Government Organisations (NGOs) and Community Based Organisations (CBOs).
· A cess of 0.5 percent on all central government taxes be credited to a dedicated Shelter Fund, to be managed by the National Housing Bank, with a budgetary support of equal amount, so as to make a long-term impact on affordable housing.
· Permit housing finance institutions (HFIs) to access long-term External Commercial Borrowing (ECB) market, since the HFIs require long-term funding sources at the lowest cost possible to pass on to the ultimate borrowers.
· Role of State Housing Boards be revamped and the Boards be encouraged to focus on playing a more active role in the provision of affordable housing, even if it is through public private partnerships.
· Funds raised through the sale of land transactions by State Housing Boards must be ring fenced, with a defined proportion to be redeployed only for affordable housing.
· Modifications in Income Tax Act for HFCs and developers engaged in affordable housing projects.
· Reduction in stamp duty rates and registration fee for affordable housing to 2% ad valorem uniformly in all states.
· Levy a flat charge of Rs. 1,000 on registration of equitable mortgages.
· Bring “affordable housing” under the infrastructure definition.
· Establish a housing finance company focusing only on housing micro-finance loans.
· Promote household savings in the informal sector
Technology for Cost Effectiveness
· A low-rise high-density built form is recommend as an appropriate measure for upgrading, redevelopment or construction of housing projects for the lower income groups.
Institutional Framework
· The real estate should be regulated through a regulator and pending the legislative process for having real estate regulators in place in the States, consideration should be given to set up Ombudsman type bodies at the State level.
· The role of the housing and real estate Ombudsman would be to monitor JNNURM housing projects, ensure that proper appraisals are being done, collect relevant data, identify beneficiaries for JNNURM housing projects and address consumer grievances.
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