Effective use of fund key for development of affordable homes

The government should effectively use the fund allocated for development of affordable homes in order to reduce housing shortage in the country, property consultant CBRE said today.
It also expressed dissatisfaction over the progress of Affordable Housing in Partnership (AHP) scheme under Rajiv AwasYojna (RAY) during 2011-2013 which saw only 1,920 units being completed and another 4,848 units under construction.
According to Housing and Urban Poverty Alleviation Ministry (HUPA, the total housing shortage in the country was 18.78 million at the start of 12th Five Year Plan (2012-17) and out of this 96 per cent was in EWS and LIG segments.

"Although the Interim Budget announcement supporting affordable housing was welcomed by the real estate industry, the segment has a long way ahead as yet," CBRE South Asia CMD Anshuman Magazine said in a statement.
He noted that a key push was given to the housing sector, with the allocation of Rs 6,000 crore for the Rural Housing Fund and another Rs 2,000 crore for the Urban Housing Fund, at the Interim Budget 2014-15.
"However, with a substantial amount of funds already allocated for the creation of affordable and/or low-cost, mass housing in the previous fiscal left unused, the effective utilisation of fund allocation for affordable housing cannot be stressed enough," Magazine said.

He noted that the National Housing Bank (NHB) is yet to set up Urban Housing Fund.

The consultant said the Rajiv AwasYojana has been empowered to extend financial support to states for the creation of affordable housing stock through PPP under the Affordable Housing in Partnership (AHP) scheme.
"Under this AHP scheme for the period 2011-2013, about 11 affordable housing projects across Rajasthan (eight projects in Jaipur) and Karnataka (three projects in Bangalore) were in progress at a total approved project cost of Rs 231.33 crore, as of January 31, 2014.
"This translates to about 6,768 affordable dwelling units, of which 1,920 have been completed and 4,848 units are under construction. For bridging an urban housing shortage of almost 18 million homes for the EWS/LIG segment, these figures fall woefully short," he said.

Magazine said although the government has put in place various funds and bodies to bridge the enormous housing shortage gap in urban India, much more needs to be done as far as implementing these policies are concerned.
"One can only hope that India's new political dispensation will work towards implementing these key policy initiatives, with better ground results," he added.
He also stressed on providing loan acess to EWS and LIG segments and relaxation in the current FDI policy on real estate such as easing the three-year lock-in period.