Implementation of the Housing for All scheme will depend on a robust approval processes, timely delivery, unlocking of land, and financially empowering the poor to buy houses, according to real estate experts.
They argue the participation of the private sector is necessary for achieving the goals of the scheme.
“The success of this scheme will depend on the right targeting of beneficiaries, which is a big challenge. There has to be a commensurate growth in the supply of low-cost housing to make this move successful,” Samantak Das, chief economist at Knight Frank India, told Business Standard.
On interest subvention, he said the government’s fiscal position was improving and policymakers must have done their homework to allow this subsidy.
JLL India Chairman Anuj Puri said by providing an interest subvention, the government was allowing access to cheaper structured finance to low-income borrowers. By increasing income limits the government had ensured a larger portion of the urban poor would be covered by the scheme, he added.
Puri said the next important step was to provide a working mechanism for the scheme, with guidelines to be formulated by the finance ministry and the Reserve Bank of India for banks to follow.
“While the enhancement of existing homes will obviously improve the quality of shelters, construction of new homes seems difficult without providing land to the urban poor,'' he pointed out.
Cushman & Wakefield’s Executive Managing Director, South Asia, Sanjay Dutt cited access to credit as the major hurdle faced by the poor. He felt a combination of interest subsidy and central assistance for housing would help.
“Overall, the approach seems to be headed in the right direction. However, implementation needs to expand and adopt a more holistic vision that situates affordable housing within the larger issue of urbanisation,” Dutt said.
Tata Housing Development Company Managing Director and Chief Executive Officer Brotin Banerjee said Housing for All could be a precursor to key reforms in the real estate sector. The scheme would lead to greater inclusion and would benefit the urban poor, including slum dwellers, he added.