Embassy of India

Paper presentation by Ambassador of India during National Housing Conference in Harare on 13 July 2016 on ‘Indian Experiences and Strategies on Housing Delivery’

Hon’ble Minister of Local Government, Public Works & National Housing H.E. Mr. Saviour Kasukuwere, 

Distinguished guests and Ladies and Gentlemen

Housing, which is an important sector of the economic growth of India, provides employment to 6.86% of the entire work force.  Though housing is considered as a private good, the role of public sector in providing housing especially to the Economically Weaker Sections (EWS) and Low Income Group (LIG) households is very significant. The role of Central Government and the States is important with respect to direct provisioning of housing and creating an enabling environment for the private sector to participate. 

Since 1950s, housing policies of India have been transformed initially from welfare centric to a well-defined constellation of economic interests. In the same way the role of the government (Centre) has been changed gradually from being a provider to a facilitator. 

During 1950-60s the central government’s policies called slums a ‘national problem’ and advocated its complete clearance from all the cities. Due to lack of the monetary capacity and the institutional capacity it was modified to improvement of the slums wherever it was feasible in addition to required clearances. During 1970-80s government realized that slum clearance was not going to solve the problem of housing and started focusing on low cost schemes to tackle the problem of slum proliferation. During 1980-90s neoliberal policies started making their ways into India. The National Housing Policy, 1994 evolved from this ideology for a more inclusive economic development by integrating with the global economy. During this period housing policies started restricting government’s role as a provider of housing and more as a facilitator in this sector. 

With the advent of the millennium, the government had comfortably placed itself in the role of facilitator of housing activities and started looking for ways to promote private partnerships for investments in this sector. This approach is reflected in the National Urban Housing and Habitat Policy (NUHHP) 2007.

Taking a departure from previous housing initiatives that focused on slums, the flagship housing programme of Pradhan Mantri Awas Yojana (PMAY) - Housing for All (Urban) by 2022 focuses on sustainable human settlements to address unmet housing demand of all urban poor including informal housing. 
.Implementation Methodology through four verticals under PMAY is:
i.     In Situ Slum Redevelopment: 
ii.    Affordable Housing through Credit Linked Subsidy
iii.    Affordable Housing in Partnership: 
iv.    Subsidy for beneficiary-led individual house construction: 

i.    Mandatory conditions have been made for the States/UTs proposed under the PMAY to be implemented within the Mission period (2022)
 
ii.    Over all progress made under four verticals of PMAY (Upto June, 2016): 

v.    No. of Cities/Towns considered for funding – 681
vi.    No. of Projects – 957
vii.    Total No. of Houses sanctioned – 7,28,840
viii.    Total Cost of Projects – Rs.46,758 crores- $ 7.2 b
ix.    Central Assistance involved – Rs.10,718 crores- $1.6 b
x.    Central Assistance released – Rs.2186 crores

Taking urbanization as an opportunity rather than a challenge, a citizen-centric approach has been adopted to align with the new Urban Agenda i.e. high quality services and access to all, improvement in economic productivity of cities, and ensuring sustainable urban growth. The principles (four) of the new urban agenda will be based on (i) Holistic and incremental development (Rural-Urban Continuum Co-existence-Inclusiveness Convergence Preserve of Urban Heritage), (ii) Development that meets the 3Es of sustainability: Equity, Economy, Environment, (iii) development based on cooperative federalism and (iv)  context driven innovation with citizen involvement. 

Government of India has also taken up a number of reforms for catalysing the housing market especially for affordable housing as well as rental housing. These include 

xi.    Streamlining Building Plan Approval Process (SAREP)
xii.    Ease of Doing Business (EoDB) in the construction sector
xiii.    Model Building byelaws (March 2016)
xiv.    Real Estate (Regulation and Development) Act, 2016: 
xv.    Drafting of National Policy on Urban Rental Housing (NURHP), 2016: 
xvi.    Value Capture Financing: 

2.    Measures have been undertaken to support the policy framework and legislation in the housing sector and initiatives for Improving Investment and Financial support to housing are: Demand and Supply side support, External commercial borrowing (ECB), Foreign Direct Investment (FDI), Public Private Partnership (PPP), Real Estate Investment Trust, (REIT), National Infrastructure and Investment Funds (NIIF) for Housing, Infrastructure Status etc. 

i.    Fiscal concessions

• Tax incentives such as Income Tax deductions on repayment of principal and interest of home loans availed, deployment of capital gains, subsidy and concessions for alternate building technologies and materials, resource mobilization through tax-free bonds for affordable housing, service tax exemptions for affordable housing projects, etc.
• Encouragement to Banks and Financial Institutions to lend to housing sector with earmarked allocation for affordable housing segment under Priority Sector Lending Norms, rescheduling/restructuring of loans to real estate projects, etc.
• Setting up of Mortgage Insurance Companies to provide Title Insurance
• Foreign Direct Investment (FDI): Removal of minimum area and capitalization requirements and other conditions, simplification of foreign investments in the country through automatic route, instead of Government route.
• Budget Announcements (2016-17): making favourable provisions
• External Commercial Borrowing (ECB): Enabled for affordable housing and slum improvement projects to enable availability of cheaper funds for developers/builders and NHB/ specified Housing Finance Companies. 
• Real Estate Investment Trusts (REIT): Allowed to garner investment in the real estate sector by providing regular income streams, diversification and long-term capital appreciation to investors. To facilitate capital investment required in the housing sector Government of India has encouraged both domestic and foreign investments for achieving the goal of “Housing for All”.  SEBI has come out with REITs Regulations [Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014. A series of tax incentives for REITs have been proposed in budgets. It is anticipated that Residential/Housing REITs will boost rental housing segment, if residential properties are covered in REITs. 
• National Investment and Infrastructure Fund (NIIF): To maximise economic impact mainly through infrastructure development in commercially viable projects both green field and brown field  a National Investment and Infrastructure Fund (NIIF) has been set up by Ministry of Finance with an annual flow of INR 20,000 crores to enable investment into infrastructure investment companies.  

In the backdrop of the recent transformative changes in the urban development sector especially housing and real estate sector, lessons learnt from implementation of the NUHHP (2007), new programmes/schemes launched by the government, the SDGs and the new Urban Development Agenda, Ministry of HUPA has decided to review/revise the existing NUHHP-2007 and initiated the process of dialogue with various stakeholders for formulation of NUHHP, 2017.

Photographs