Page 17 - CO JAN 2020

COVER STORY

the project, which is a major concern in most other initiatives where Since the funding and the revenue system are distributed across
projects are stalled due to lack of funding. This will open up lot of projects within Smart City initiatives, the mission proves profitable
avenues for investment from other countries and various financial for all involved service providers. The convergence of schemes
sources. such as the Housing for All and Smart Cities missions will be most
appropriate to achieve optimal results with proper implementation.
New Schemes Isolated policies will yield much lower results.
These measures encourage developers through several incentives,
subsidies, tax benefits and most importantly, institutional funding On the larger canvas, the goals for urban development in India
and are thus likely to spur growth in the affordable housing should be to create sustainable, inclusive and smart urban centers
segment in India. with good housing standards and participation of the private
sector. Affordable housing never really took off in the realm of
Affordable housing reflected a growth of 27per cent between the previous government, as it remained a utopian dream for
January to September, 2017 (y-o-y) compared to an overall over 10 years.
residential housing contraction of 33per cent. That is possibly
a result of the mission-mode implementation of the PMAY-HFA; There was a raft of reasons for this. Inability to acquire of land in
affordable housing’s new found infrastructure status; as well as urban areas at affordable price, inadequate infrastructure and a
the much-improved inflow of formal credit (NBFCs and banks) to lengthy approval process -- all combined, making the progress
the segment. very tardy. But the current government is taking the bull by the
horns and taming it.
Affordable housing finance is estimated to be a 6 lakh crore
business opportunity by 2022, by which time the Government seeks Robust Outlook
to achieve housing for all citizens. The Government has launched Large-scale urban developments are becoming increasingly
a number of initiatives to boost affordable housing across the difficult due to lack of land parcels, congested transit routes,
country. Statistics show a sharp increase in loan disbursements and lack of finance, rising input costs and regulatory hurdles.
launching of new projects in the segment in 2016-17. Despite this, However, it is vital that these issues are addressed urgently so
there was an increase in non-performing home loans, particularly that a comprehensive framework can be established in ensuring
in the lower slabs of housing loans. The Credit linked subsidy the development of affordable housing. Once the Regulatory
scheme proved to be quite effective in improving the affordability environment for affordable segment is fine tuned, including a
factor among the Economically Weaker Section. friendly GST regime, Affordable Housing stocks on the share market
will gain valuations.
Private players
The Smart Cities mission encourages participation of private Construction cost
entities, thereby increasing the productivity and quality of the While land prices account for the majority of cost in the high end or
projects. This will provide an integrated platform for private players luxury projects in real estate, the construction cost play a vital role in
such as housing developers and infrastructure service providers. the case of affordable housing projects. This is due to the Fact that

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