DELHI, (Smart Cities News): People migrate to cities in search of employment. Due to their low-paying jobs, they find it difficult to spend money on housing. As a result, slums, squalor, and informal settlements result in poor conditions that lack basic services. Hence, affordable housing with a respectable standard of living becomes imperative to improve the liveability, workability, and sustainability in a city, says Shri Kunal Kumar, Joint Secretary, Ministry of Housing and Urban Affairs (MOHUA) and Mission Director, Smart Cities Mission (SCM).
India has witnessed an unprecedented increase in the scale and pace of urbanization. As per the last census, the country has a 31 percent urban population residing in more than 4,000 cities and towns. The High Power Expert Committee Report (2011)1 has estimated that by the year 2031 the country will have more than 87 metropolitan areas and 600 million people will be living in urban areas and that migration to urban areas accounts for a 20-25 percent increase in urban population. This will also result in rising demands for affordable housing.
Affordable Housing has been one of the focus areas for the government over the last several years. Some of the challenges and critical issues being faced in India concerning the development of affordable housing include lack of availability or improper selection of land parcels, lengthy statutory clearance and approval processes, restrictive development norms, planning, and project design, insufficient action in providing social and external connectivity infrastructure and mechanism for maintenance, high cost of construction finance, etc. We also have capacity constraints such as the inadequate technical capacity of implementing agencies, lack of private participation, and lack of mainstreaming of low-cost technologies to reduce cost.
Some of the policies, programmers, and initiatives undertaken by the Government of India in the Affordable Housing sector during the last decade include:
- Pradhan Mantri Awas Yojana (PMAY) is promoted to provide housing for all in the country at an unprecedented scale and speed, by 2022.
- External Commercial Borrowing (ECB) allowed for affordable housing projects.
- Opening up of Foreign Direct Investment (FDI) for development of townships, housing, built-up infrastructure, and construction development.
- Construction of low-cost houses (that meet certain conditions) exempted from service tax from March 1, 20162.
- The Credit Risk Guarantee Fund with a corpus of Rs 1200 crore in collaboration with the National Housing Board (NHB) was set up to facilitate credit availability to low-income customers without any collateral.
- Urban Housing Fund Refinancing Scheme with a corpus of Rs 2000 crore has been created.
- Tax-free bonds are issued by HUDCO and NHB to ensure a lower cost of borrowing.
- Recent amendments to the Finance Act (2016) have introduced a 100 percent tax holiday to affordable housing subject to certain conditions.
The Smart Cities Mission (SCM), launched in June 2015 to create 100 Smart Cities in five years, is one of the biggest urban missions in India with its overarching goal of accelerating economic growth and improving the quality of life in Indian cities.
The Mission has a unique two-pronged strategy consisting of Pan-City and Area-Based Development (ABD) projects. In ABD, cities in consultation with the people select an area for implementation of infrastructure projects, depending on the model of development. In pan-city development, city-wide solutions are being implemented across the whole city. These technology solutions, such as Integrated Command and Control Centers (ICCC), Intelligent Transport Management System (ITMS), Smart lights, Disaster Management, etc. benefit 100 million people across all smart cities.
Under the ABD projects, core infrastructure elements in Smart Cities also include affordable housing especially for the poor, and the safety and security of citizens, particularly women, children, and elderly with the provision of accessibility infrastructure. The Smart City proposals for housing consider planned interventions related to housing on issues such as slum upgrading, redevelopment, and rehabilitation, providing affordable and inclusive housing, ensuring at least 15 percent reservation for EWS in the ‘affordable housing’ segment, and constructing hostels for working women. It is important to understand that the mission is woven around six principles: citizens at the core, more from less, cooperative and competitive federalism, inclusiveness, technology, and significantly enough, the convergence of financial resources and various government missions and programmers. It is the principle of convergence that has brought in an unprecedented efficiency in the implementation of affordable housing projects, particularly those proposed under PMAY. The previous schemes were designed towards making ‘slum-free cities’ and with greater involvement of the central, state, and local governments. However, this ‘top-down’ design reflected a lack of efficiency from the central to the local governments for the effective implementation of housing projects. At present, SCM and PMAY, both designed ‘bottom-up’, have set up a new template of supply of affordable houses not only in the Smart Cities but in the entire country. PMAY includes a large subsidy to EWS/LIG and MIG; it promotes mandatory homeownership for women, in-situ rehabilitation of slums, and facilitates the use of eco-friendly construction of houses. The scheme promises equal housing opportunities for all.
Out of a total investment of Rs 2 lakh crore on all Smart Cities Mission projects, 143 affordable housing projects have been proposed amounting to nearly Rs 18,000 crore. 54 projects out of these, worth Rs 2634 crore have been completed; work is underway on 53 projects worth Rs 12,723 crore. 36 projects worth Rs 2,223.02 crore of these are under convergence with PMAY.