HOUSING POLICIES - INDIA

Contents…………..
 Changing Scenario of Housing Policies , Focus of Housing Policies
 Setting up of Housing Boards, Slum Clearance Boards, Development
Authorities
 Current Housing Shortage
 Budget Allocation
 Innovative Policies
 New Thrust Areas
• FDI
• PPP’s
• Micro finance
• Township Policies
• JNNURM
Major Issues????

Need For National policies?

Change in Policies???When ,why???

Housing Policies – Issues
Major Issues in Housing Policies
 Rising cost of building materials
 An increasing number of dwelling units required
 Low capacity to pay, low accessibility to formal finance
 Less technical (constructional) options available
 Requirement of cost recovery
 Decline in government funds available for housing
 Unorganized sector
Five Year Plan & Housing Sector Development
1st Five Year Plan (1951-56)
 Several Institutions including a separate Ministry and National Building
Organization were created
 Emphasis was given on construction of houses for government
employees and weaker sections
 A sizeable part of the plan layout was spent for rehabilitation of the
refugees from Pakistan and on building the new city of Chandigadh
 Introduction of subsidized scheme for industrial workers in the year
1952

2nd Five Year Plan (1956-61)

 The Industrial Housing Scheme was widened to cover all workers
 Three new schemes were introduced, namely, Rural Housing, Slum Clearance and
Sweepers Housing
 Decentralization of Institutional Framework for housing development
 Town and Country Planning Legislations were enacted in many states and necessary
organizations were also set up for preparation of Master Plans for important towns
Five Year Plan & Housing Sector Development
3rd Five Year Plan (1961-66)
 Gave greater emphasis on land use planning and land acquisition, planned growth of
settlements, state capitals of Gandhinagar and Bhubaneshwar were developed
 Setting up of housing boards and other public agencies to take care of the housing
shortage
4th Five Year Plan (1969-74)
 Plan stressed the need to prevent further growth of population in large cities and need for
decongestion or dispersal of population. This was envisaged to be achieved by creation of
smaller towns and by planning the spatial location of economic activity
Housing & Urban Development Corporation (HUDCO) was established
in 1970 to fund the remunerative housing and urban development
program
A distinct change was made in the policy to affect shift from the formal
housing to site and services programs and environmental improvements
of slums
Scheme for Environmental Improvement of Urban Slums was
undertaken in 1972 with a view to provide a minimum level of services,
like water supply, sewerage, drainage, street pavements in 11 cities with
a population of 8 lakh and above
Five Year Plan & Housing Sector Development

5th Five Year Plan (1974-79)

 Reiterated the policies of the preceding plans to promote smaller town in new urban
centers, in order to ease the increasing pressure on urbanization. A task force was set up
for development of small and medium towns

 The Urban Land (Ceiling and Regulation) Act was enacted to prevent concentration of land
holding in urban areas and to make available urban land for construction of houses for the
middle and low income groups

6th Five Year Plan (1980-85)

 Integrated provision of services along with shelter, particularly for the poor
 The Integrated Development of Small and Medium Towns (IDSMT) was launched in
towns with population below 1 lakh for provision of roads, pavements, minor civic works,
bus stands, markets, shopping complex etc.
 Plan envisaged to provide for sites and services instead of direct subsidy to EWS
category
Five Year Plan & Housing Sector Development
7th Five Year Plan (1985-90)
 Stressed on the need to entrust major responsibility of housing construction on the private
sector. A three fold role was assigned to the public sector, namely, mobilization for
resources for housing, provision for subsidized housing for the poor and acquisition and
development of land
 The National Housing Bank was set up to expand the base of housing finance
 NBO was reconstituted and a new organization called Building Material Technology
Promotion Council (BMTPC) was set up for promoting commercial production of
innovative building materials
 An Urban Poverty Alleviation Scheme known as Urban Basic Services for the poor
(UBSP) was launched
 As a follow up of the Global Shelter Strategy (GSS), National Housing Policy (NHP) was
announced in 1988. The long term goal of the NHP was to eradicate houselessness,
improve the housing conditions of the inadequately housed and provide a minimum level
of basic services and amenities to all
 A special central sector scheme, called Indira Awas Yojna for the scheduled caste/tribe
population was launched
Housing Policies
National Housing Policy (NHP), 1988 (adopted in 1994)

Objectives
 To motivate and help all people, in particular, the houseless and the inadequately housed,
to secure for themselves affordable shelters through access to land, material, technology
and finance

 To encourage investment in housing in order to achieve a sustained growth of nations

housing stock, and its proper conservation, renovation and up gradation

 To create an enabling environment by eliminating constraints and developing efficient and

accessible system for the delivery of inputs to maximize housing stock

 To improve the environment of human settlements with a view to raising the quality of life
through the provision of drinking water, sanitation and other basic services

The long term goal of the NHP was to eradicate houselessness, improve the housing
conditions of the inadequately housed and provide a minimum level of basic services and
amenities to all. The role of Govt. was conceived, as a provider for the poorest and
vulnerable sections and as a facilitator for other income groups and private sector by the
removal of constraints and the increased supply of land and services.
Five Year Plan & Housing Sector Development

8th Five Year Plan (1992-97)

 8th Plan accepts “housing essentially as a private activity” but recognizes the need for state
intervention “to meet the housing requirements of a majority of vulnerable sections as well
as to create an enabling environment for accomplishing the goal of “Shelter for All” on a self
sustaining basis

 Constitution of 74th Amendment Act

 The scheme for NRI investors in housing launched

 The social and other schemes initiated in the earlier plans were to be continued in modified
forms
Five Year Plan & Housing Sector Development
9th Five Year Plan (1997-2002)
 9th plan focuses more on HHs at the lower level of society, such as BPL section, SC/ST,
Disabled, Freed Bonded Laborers, Slum Dwellers and Women Headed HHs

 Government will continue to act as facilitator but more direct interventions by the govt.
in case of lower segments of the housing market and selected disadvantaged groups

 Two Million Housing Program (2MHP) was launched, out of which 35% dwelling units to
be constructed in urban areas

 Land market reforms would be undertaken through restructuring legal, planning and
fiscal provisions

 Promoting and adopting energy – friendly, eco friendly and environment – friendly
technologies and building materials

 A package of incentives and concessions to attract the private sector to shoulder the
task of housing for the urban poor

 Apart from new construction, the Ninth Plan agenda will take up the massive task of up
gradation and renewal of old and dilapidated housing stock
Housing Policies

National Housing Policy (NHP), 1998

Objectives
 Creation of surpluses in housing stock either on rental or ownership basis
 Providing quality and cost effective shelter options, especially to the vulnerable groups and the
poor
 Ensuring that housing, along with the supporting services, is treated as a priority and at par with
infrastructure sector
 Removing legal, financial and administrative barriers for facilitating access to land, finance and
tech.
 Forging strong partnership between private, public and cooperative sectors to enhance the
capacity of the construction industry to participate in every sphere of housing and habitat
 Using technology for modernizing the housing sector to increase efficiency, productivity, energy
efficiency and quality
The government through a National Agenda declared “HOUSING FOR ALL” as a priority area
and has set a target of construction of 2 million houses every year with emphasis on the poor
and deprived, out of which 0.7 million houses shall be constructed in the urban areas
Housing Policies
The difference in approach in National Housing Policies of 1988 and 1998
 The 1998 National Housing & Habitat Policy, strongly prescribes public private partnership
and calls for greater role for private and the NGO sector particularly , to accelerate shelter
delivery for the vulnerable sections of the society

 More emphasis on infrastructure relating to urban and rural settlements which includes
roads, electricity, sanitation, water and environment

 More defined role of various agencies, UDA, ULBs

 Shift from subsidy based to credit cum subsidy based programs, as the new policy
recognizes that subsidies are not effective and only add to the burden of the govt.

 Emphasis on energy saving building materials and techniques

 New policy deals with the employment issues in the building sector
Five Year Plan & Housing Sector Development
10th Five Year Plan (2002-2007)
 Repeal of the Urban Land Ceiling and Regulation Act at the State Level

 Rationalization of Stamp Duty is to bring it down to no more than 5%

 Reform of Rent Control Laws, initiated to remove rent control so as to stimulate private
investment in rental housing

 Information technology is being introduced to simplify the process of registration

 Reforms in Property Tax are also being sought so that it may become a major source of
revenue for the urban local bodies

 Increase the proportion of household savings in the housing sector by legislative changes in
the existing income tax laws

 Encouraging the development of new integrated townships through foreign direct

investment

 The total number of houses required cumulatively during 10th plan period is assessed at
22.44 million

 VAMBAY
Housing Policies
National Urban Housing & Habitat Policy, 2005
 It gives emphasis on in situ urbanization to reduce pace of rural to urban migration, so
focus on supply of land, infrastructure and employment opportunities in rural areas

 Guiding urban and rural settlements so that a planned and balanced growth is achieved
with the help of innovative methods such as Provision of Urban Amenities in Rural Areas
(PURA) leading to in-situ urbanization

 It gives more emphasis on the development of small and medium size urban centers

 Progressive shift to a demand driven approach and from a subsidy based housing scheme
to cost recovery –cum – subsidy schemes for housing through pro active financing policy
including micro financing, self help group programs

 Involving disabled, vulnerable sections of society, women and weaker sections in

formulation, design and implementation of the housing schemes

 Establishing a Management Information System in the housing sector to strengthen

monitoring of building activity in the country

 Various schemes and programs – 2 million housing, VAMBAY, NSDP, SJSRY, JNNURM –
BSUP & IHSDP
Five Year Plan & Housing Sector Development
11th Five Year Plan (2007-2012)
 Housing backlog estimate in 11th plan is 26.53 million. Most of it is for EWS and LIG
sections, which doesn’t seem to be getting translated into economic demand due to lower
affordability by the poor

 Despite many policy measures and initiatives, the coverage of urban poor with the
intended benefit of adequate shelter and access to basic services is not achieved to the
desired extend. Further market forces supported by upward trends in the economic growth
have contributed to increasing pressure on urban land. This situation needs to be
addressed in future policy initiatives

 Opening of the housing sector to FDI, with limited locking period

 Setting up of REIT(Real Estate Investment Trust) and other Real Estate Mutual Funds
WHO WOULD PROVIDE HOUSING????
& most of all !!! The following?

-- Land & Material.

--- Techonology.
--- Financial Support,
----Instutional Support,
Players in the Housing Sector
CENTRAL GOVERNMENT AGENCIES
The central Ministry of Urban Development is the apex policy making body for urban
development, including housing activities. It overviews the state level programs, lays down
policy perspectives and builds up data systems for the entire country, besides launching
projects for the benefit of certain targeted sections of population.eg the five year plans,habitat
policy.

AGENCIES AT THE STATE LEVEL

Public sector housing is basically the responsibility of the state govt. Each of the state govt.
has created a state level Housing Boards for this purpose. In Madhya Pradesh (MP), the
Madhya Pradesh Housing Board (MPHB) functions like state level HB, engaged in business of
development & construction of housing colony and commercial complexes for all sections of
society. Out of the total housing supply in urban formal sector, MPHB’s annual average
contribution is about 25%. Slum Clearance Boards, have also been set up in MP.
CITY LEVEL PUBLIC AGENCIES
In large cities, development authorities take the major responsibility for designing and
executing housing programs, besides the state HBs. A few municipal cooperation also
undertaken housing projects.
Like in Bhopal, Bhopal Development Authority (BDA) and Bhopal Municipal Cooperation
(BMC) both undertake housing projects
Players in the Housing Sector
PRIMARY COOPERATIVE SOCIETIES
A certain minimum number of people can form a cooperative and register it at the office of the
Registrar of Cooperative Societies as per the Cooperative Housing Society Acts of the state
or UT. Common in Gujarat.

PRIVATE DEVELOPERS AND BUILDERS

The number of real estate developers who purchase plots within the cities or in outlying
areas, and develop and build houses on these for selling in the market.

INDIVIDUALS OR HOUSEHOLDS
Housing in India is primarily the responsibility of individuals or households. Small scale
private development is the dominant mode of house construction even in the formal
residential colonies. The poor, on the other hand, resort to various informal methods for
acquiring shelter, particularly in the large cities. In several cities, slum dwellers have
organized themselves into cooperatives and build shelter for themselves through community
efforts
 Types of Housing

Slum re-habilitation Housing Formal Housing

Township EWS
 Public Private Partnership – Rajarhat in West Bengal
Joint venture partners: WBHB & developer group
JV structure: company with equity shares

Share holding of each:

49.5 % by WBHB (to avoid AG audit)
49.5 % by developer
1 % to public
Housing stock preconditions:
 50 % of housing stock for LIG/MIG  Land allotted by the Govt. to the Joint
 Govt. to have a say in pricing of the above
Sector Co. formed by the joint venture
between the WBHB and the private
 Min 10 % to be allotted as per govt. Direction.
developer.
 JV pays the land price to HUDCO. In case of
 The cost of the land acquired by WBHB be
delay 14 % penal interest payable.
payable by the developer.
 Land possession assigned to WBHB by HUDCO  50 % is adjusted as equity of the developer
deemed joint possession of WBHB & JV till in the project, since a Public Ltd. Company
completion of construction & sale. will be formed and balance 50 % will be
 Land encumbrance clearances responsibility of payable in cash to the WBHB.
WBHB.  Minimum 50 % of the total no. of houses
 Completion: 6 years. constructed on site will be for LIG and MIG
category.
Township – Gujarat International Finance Tec-City (GIFT)
 Approximately 27,000 ha of land between have been
earmarked for the development of a Central Finance and
Business District (CFBD), Institutional areas, Knowledge
parks, Integrated Townships, etc. The CFBD has been
named the Gujarat International Finance Tec-City
(GIFT)

 GIFT is being designed as a hub for the global finance

services industry. The Project design has benefited
greatly from the inputs of a large number of domestic and
international experts who have had an opportunity to
determine the key needs of Companies in the financial
services space. GIFT is being designed as a hub for the
global finance services industry. The Project design has
benefited greatly from the inputs of a large number of
domestic and international experts who have had an
opportunity to determine the key needs of Companies in
the financial services space. An attractive pricing strategy
is also being developed to ensure that it is a fraction of
the cost that is ordinarily incurred in other Indian and
global finance cities
SPECIAL SCHEMES

•WHY DO WE NEED THESE ???

•IMPLEMENTATION MECHANISM??
 Housing Special Schemes & Programs
 NIGHT SHELTER FOR URBAN SHELTER LESS: Provide night shelter and sanitation
facilities to footpath dwellers, was in operation since 1988-89. It was a demand driven scheme
and implementation is undertaken by the state govt. or local municipal bodies or state
sponsored agencies. The scheme has been discontinued since 2005.

 TWO MILLION HOUSING PROGRAM (2MHP): It was launched during 1998-99. It was
a loan based scheme, which envisages facilitating construction of 20 lakh additional units
every year (7 lakh in urban areas and 13 lakh in rural areas)

 VALMIKI AMBEDKAR AWAS YOJANA (VAMBAY): Centrally sponsored scheme with

the primary objective to facilitate the construction and up gradation of the dwelling units for the
slum dwellers and to provide healthy and enabling urban environment through community
toilets under Nirmal Bharat Abhiyan, a component of the scheme. This scheme was launched
in 2001. VAMBAY and the discontinued National Slum Development Program (NSDP) have
been subsumed in a new scheme called Integrated Housing and Slum Development Program
(IHSDP). This scheme was launched along with Jawaharlal Nehru National Urban Renewal
Mission (JNNURM) on Dec.2005. The scheme aims at having an integrated approach to
ameliorate the conditions of the urban slum dwellers who don’t possess adequate shelter and
reside in dilapidated conditions. It is applicable to all cities and towns covered under JNNURM
Housing Schemes & Programs
 NATIONAL SLUM DEVELOPMENT PROGRAM (NSDP): This scheme was
launched in 1996. The objective of this program was up gradation of urban slums by
providing physical amenities like water supply, storm water drains, community bath,
widening and paving of existing lanes, sewers, community latrines etc. It has been
discontinued from the financial year of 2005-06.

 SOCIAL HOUSING SCHEMES: Implemented in the state sector with State Plan
provision and loan assistance from HUDCO and other financial institutions. Housing
scheme for Economically Weaker Sections (EWS) with household income of Rs. 2100
/month or less. Housing scheme for Low Income Group (LIG) with income of not more
than Rs.4500/month.

 TWENTY POINT PROGRAM – 2006: First it was launched by the GOI in 1975, to
eradicate poverty, reduce income disparity, socio economic inequalities and also to
provide basic amenities including housing, for improving the quality of life of the poor and
other weaker sections of the society. It was revised in 1982 and again in 1986.
Housing Schemes & Programs
 The Twenty Point Program -2006 consists of 20 points and 66 monitorable items. The
Ministry of Housing & Urban Poverty Alleviation (HUPA) is the nodal Ministry for the
following three points;
 Garibi Hatao (Poverty Eradication)

 Subke Liye Awas (Shelter for all)

 Basti Sudhar (Improvement of Slums)

This is a State Plan Scheme.

 SWARNA JAYANTI SHAHRI ROJGAR YOJANA: This scheme is being

implemented as a Centrally Sponsored Scheme for the benefit of urban poor on all India
basis. Those program seeks to provide gainful employment to the urban unemployed or
underemployed poor by encouraging them to set up self employment ventures by those
who have read up to 9th standard and through provision of wage employment by utilizing
their labor for construction of socially and the economically useful public assets.
Housing Schemes & Programs
 INDIRA AWAAS YOJANA (IAY): Indira Awaas Yojana (IAY) was launched during
1985-96 as a sub-scheme of Rural Landless Employment Guarantee Program (RLEGP)
which began in 1983. IAY thereafter continued as a sub-scheme of Jawahar Rozgar
Yojana (JRY) since its launching in April, 1989.

The objective of IAY is primarily to help construction of dwelling units by members of

Scheduled Castes/ Schedule Tribes, freed bonded laborers and also non- SC/ST rural
poor below the poverty line by providing them with grant-in-aid. The target group for
houses under IAY is people below poverty line living in rural areas belonging to
Scheduled Castes/ Scheduled Tribes, freed bonded labourers and non- SC/ST
Categories.
 JAWAHARLAL NEHRU NATIONAL URBAN RENEWAL MISSION (JNNURM):

Sub mission on Basic Services to the Urban Poor (BSUP): Main

thrust will be on integrated development of slums through projects for
providing shelter, basic services and other related civic amenities with
a view to providing utilities to the urban poor

Integrated Housing and Slum Development Programs (IHSDP):

Introduced by the GOI for improvement of slums in the cities/towns
not covered under JNNURM in the country.
Intervention Vs Liberalization
 Less progress in the most complex and difficult areas of the shelter process: Land &
Finance. Access to these crucial shelter inputs remains restricted for low income groups.

 Enabling approach requires that different actors in the shelter process are free to utilize
their energies, talents and resources to max. effect.

 Commercialization is required which makes investment in land and housing more

attractive to large scale capital

 Removing supply constraints for poorest families

 Deregulating land and housing markets

 Government’s intervention for liberalization of housing

 Urban Land (Ceiling & Regulation) Act

 Willingness on the part of the state to resist speculative pressures and ensure the flow of
land to the poor

 Need for Govt. intervention to encourage private banks and other institutions for
modification of credit regulations, in order to accommodate the low income groups
FDI
 India contributes only 1 % of its GDP to the Global FDI market in return, which amounts to
only 2 % of the Global FDI market.
 FDI flows in India over the last 14 years have grown at the CAGR of 45 %turning into
multiples of more than 12000 times.
 India’s share in FDI inflows among developing countries reached a peak of 1.9 per cent in
1997. It declined sharply to 1 per cent in 1999 and 2000 but has recovered sharply to 1.7
per cent in 2001.
 The World Investment Report 2005 in its survey of the flow of foreign direct investment in
various countries has named India as one of the three most favored destinations for
foreign direct investment. The survey has put China, India and United States as the most
favored destinations for FDI
 Indian FDI policy welcomes foreign investment in virtually all sectors except defense,
railway transport and atomic energy.
 No government approval required for FDI
 Single window clearance facility provided in certain states to simplify the approval process
for new ventures.
HOUSING FOR ALL??
The Slum Areas (Improvement and Clearance) Act, 1956
THANK YOU !!!