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Affordable housing to soon become reality

With Chief Minister Prithviraj Chavan approving the joint venture policy for the Maharashtra Housing and Area Development Authority (MHADA) this week, the construction of at least a lakh affordable houses is expected to take off in the peripheral areas of the Mumbai Metropolitan Region in the immediate future.

The projects are spread across Thane, Kalyan-Dombivli, Vasai-Virar, Panvel and Raigad. Officials said these projects were issued the letter of intent by MHADA almost a year ago but were stuck for lack of a formal approval from the state government.

The policy has been framed keeping in mind the urgency of generating public houses on land belonging to private landowners in view of the housing board’s own shrinking land bank.

The policy will be applicable not only in Mumbai, where the land scarcity is alarming, but also in regions such as Thane, Pune, Nagpur and Aurangabad.

Accordingly, private landowners willing to transfer the ownership of their land to MHADA will be allowed a total FSI of 2.5. This land has to be of a minimum area of 2,000 sq m. Of the total FSI, the landowner or developer will get to carry out construction of 1.75 while the remaining 0.75 FSI will be used for constructing houses for MHADA.

While the higher FSI is meant to compensate the developer for his land cost, MHADA will pay the construction cost as well as 90 per cent of the infrastructure cost to the developer.

The entire project will have to be completed within two years.

“Of the houses that are handed over to MHADA, about 60 per cent will be reserved for the economically weaker sections, low and middle income groups while the rest could be for the high income category. A state-level project management committee will be appointed to oversee the construction so that the quality of the MHADA’s share of houses is not sub-standard,” said a MHADA official.

So far, the only ongoing joint venture schemes of MHADA are on its own land. The housing board is banking on the redevelopment of its three large colonies — Patra chawl in Goregaon, Aaram Nagar in Versova and PMGP colony in Mulund — where it has entered into a joint venture with private builders.

These three ventures are expected to fetch the housing board 3,000 apartments. Due to the shortage of land, the Mumbai Board of the MHADA has been able to put up only 867 houses for sale during its annual lottery this year as against 4,000 houses each year.

The houses, starting from 15 lakh to Rs 57 lakh are located in Kurla, Malad, Powai, Borivli, Sion and Kandivli.

Indians prefer 2nd-hand property: Study

Mumbai: While buying a house, majority of the Indians prefer a ready-to-move property than new launches, a recent study has said.
“About 74 per cent home buyers across India are negotiating for a ready-to-move property,” real estate market news portal Track2Realty’s survey titled ‘Home Buyer’s Satisfaction Index’ said.

The survey says out of the remaining 26 per cent, who opted for new launches for price discounts, as many as 82 per cent were now repenting their decision, mainly due to delays in the project completion.

The survey was conducted in Delhi, Mumbai, Kolkata, Bangalore, Kochi, Ahmedabad, Chennai and Patna.

About 68 per cent of buyers prefer ready-to-move property because they could avail of tax benefits only after getting the possession of the house, it says.

“Saving tax on the EMIs is one of the big reasons why eight out of 10 plan their house buying,” it points out.

Around 92 per cent of the respondents agreed that buying under-construction property makes them suffer double blow of paying rent and EMI and not getting any tax benefit.

Nearly 52 per cent were ready to pay slightly more for a ready-to-move property because they wanted to make sure who their neighbours would be and the overall community profile.

Delay in the delivery was cited as a major reason by almost 92 per cent buyers for reluctance to book a new launch.

Faulty design or construction scares 70 per cent of home buyers, who opted for “you get what you see” projects.

“About 78 per cent say they have not got what was showcased as the sample flat,” the survey adds. Around 72 per cent respondents complained about developers passing off cafeterias as “clubs” and under-equipped gyms.

Also, 72 per cent were scared of going to consumer courts and face the legal hassles.

More than 62 per cent, therefore, said they preferred to settle for a flat in the secondary market.

How a big house could become a threat for your retirement planning

N Pattabhi Ramiah thought of investing in a new house, some years ago when he got a decent sum as his retirement corpus. “The house that I was staying was fetching me around Rs 60 lakhs, I thought of pooling in around Rs 10 lakhs from my retirement corpus and move to larger 2BHK house at Andheri in Mumbai,” he informs.

But for Pattabhi (66) and his wife N Giribala (63), the move was just the beginning of his troubles. “Firstly I have to pay more than double of what I used to pay as monthly maintenance. Initially I never realized it. But at times it does becomes a bit difficult for retired people like us to pay the huge sum,” he explains.

He has to pay around Rs 6000 per month as monthly maintenance and other charges to the housing society where he lives. He also says that as his house is new, he still doesn’t have to worry about keeping a corpus for taking care of the repairs and the upkeep of the house as yet.

“But eventually I would have to think about that as well,” he says. He confesses that at times, he does regret making this shift as he was a lot happier earlier living in his smaller house.

While having a bigger house is a matter of pride for most, but for retired people like Pattabhi with virtually no income ( Or very little income), the cost of maintaining the property may put a burden on their retirement corpus. It could also adversely impact their travel and their retirement plans.

How the costs escalate

A larger house needs more furniture and furnishings and uses up more electricity. Other than that there are lots of expenses that escalate as the size of the house increase.

Expenses like the monthly maintenance charges are based on the square feet space in the house and go anywhere between Rs 3 to Rs 8 based on the amenities and the locality of the apartment. So for example if the flat size is around 1000 square feet and the monthly maintenance charge comes to around Rs 5 per square feet, then you have to pay around Rs 5000 per month to your society as maintenance charges. (Rs 5 * 1000= Rs 5000 per month).

Other than monthly maintenance charges, one also needs to pay out the property tax on the value of property to the government. It is the local tax on building and is paid to the local municipal authorities.

The authorities consider factors like the age of the building and the location as some of the factors before arriving at the rate able value of the property. (The ratable value is based on fair and reasonable annual rent of the property /premises) A standard deduction of 10 percent is allowed on it. Generally the taxes are 75% to 80% of the ratable value for residential premises. ( Depend on the age, location and the amenities).

There are other taxes too like the water tax levied by the local municipal authorities. ( Again based on the ratable value)

Insurance charges for your property are another expense that you should factor in. In addition to protecting your house, the home insurance covers your valuable personal property as well. Your personal property could consist of your furniture, clothing, stereo, computer equipment, jewelry etc.

Generally you have to give constructed area in square feet, type of construction and the details of all assets & equipment like furniture, electronic equipment, air conditioners/ refrigerator, jewellery along with year of purchase and purchase price to the insurance company. Based on the information, the insurance company decides on the premium. So you would need to pay a higher premium for the personal property you keep in your bigger house.

A bigger house would also need a larger corpus to be kept aside for its repairs and long term upkeep.

Downsizing as an option

Pankaj Kapoor, Managing director of Laises Foras informs that downsizing to a smaller home is probably one of the most inconvenient options especially for those that have been in a property for a long time which may also hold a lot of family history or sentiment.

However the financial benefits for retired people could be much more as they don’t have to maintain a big home and they benefit financially by moving into a smaller dwelling. Lower maintenance, lesser property and other taxes are some of the advantages. Plus you would also be able to save a good amount of difference money by selling your bigger house and shifting to a smaller one. The difference amount saved can also go in your retirement corpus.

Kapoor explains that there are few factors that you should consider before you take the step. “Make sure you are emotionally ready for it as you have made friends and relations over the period of time. Also if the new place is well connected and conveniently located. You must find out more about the new location and also take your future into account,” he adds.

Making the most out of it

If you are worried with the mounting expenses of your big house post retirement, you also have the option of either taking in paying guests (PG) or renting out a part of your property. There is a huge demand for PG accommodation in the city, so if you let out a part of your property, most of your expenses like the utility bills and monthly maintenance expenses are split.

Housing demand to remain stagnant till economy improves

Housing demand is expected to remain subdued in short-to-medium term despite cut in key policy rates by RBI, global property consultant CBRE has said.
“While the recent rate cut by the RBI has helped generate positive sentiments in the market, stagnancy in demand will continue in the short to medium term unless there is an overall improvement in the economic scenario,” CBRE South Asia Chairman and Managing Director Anshuman Magazine said.

RBI had last month cut the repo and reverse repo rates by 50 basis points.
In its report ‘India Residential Market View – 2011′, CBRE said the housing market witnessed stagnant demand for most part of the last year.

NCR and Mumbai witnessed steady escalation in housing prices during the revival period from 2009 to first half of 2011 (as high as 40-50 per cent in certain micro-markets), the latter half of the last year brought in stagnation in overall prices, the report found out.

“During 2011, we witnessed initial buoyancy in the real estate market as investor and developer sentiment improved, riding on the high residential demand wave,” Magazine noted.

However, he said, with repeated interest rate hikes, rising prices and prevailing economic conditions, the market saw a dip in sales towards the middle of the year.

This resulted in a supply pile-up in the key markets of NCR (National Capital Region), Mumbai and Bangalore, leading to capital values remaining flat across various micro-markets in these three leading hubs.

On the NCR market, the consultant said it witnessed considerable appreciation in capital values in the first half of 2011.

Most micro-markets in Gurgaon remained central to the residential demand curve for the NCR region, with both primary as well as secondary market witnessing significant activity. However, the growth in capital values slowed in the last few months of 2011.

The Noida market witnessed issues with land acquisition across key locations such as the Greater Noida Expressway and Noida Extension.

Akhilesh scraps Maya projects, SC/ST quota in govt contracts

The Uttar Pradesh government on Friday scrapped as many 26 welfare schemes and the policy of reservation in government contracts for Scheduled Castes and Tribes, launched by the previous Mayawati government, and approved a proposal to give a monthly unemployment allowance of Rs 1,000 to those above 30 years.

The government also made changes in the Ambedkar village development scheme and renamed it after the late Ram Manohar Lohia. Selection of villages for development under the scheme will be made on the basis of certain criteria of backwardness, and not the population of Scheduled Castes, as was the practice earlier.

The decisions were taken by the state Cabinet, with Chief Minister Akhilesh Yadav in chair.

Unemployment allowance will be given to those unemployed people who have passed matric, are above 30 years of age and registered at an employment exchange until March 15 of the previous financial year. It will continue until the age of 40 years, or until a beneficiary finds job.

Only persons whose family income does not exceed Rs 36,000 annuallly, and whose parents’ income does not exceed Rs 1.5 lakh annually will be eligible. The money will be paid lumpsum once every quarter. The decision is likely to benefit an estimated nine lakh people in the first year and cost the exchequer Rs 1,113 crore.

As for the decision to scrap 26 schemes, an official announcement said it was taken after consultation with all departments to make the best use of available resources for speedy and inclusive development. It will make available Rs 4,861.72 crore for priority areas of the government.

Most of the scrapped schemes were named after Dalit personalities, including B R Ambedkar, BSP founder Kanshiram and Savitribai Phule. These dealt with urban development, housing, rural development, poverty alleviation, welfare of women and girl child, education, minorities welfare, social welfare and irrigation.

The most important among these were the Kanshiram Garib Awas Yojna for giving houses to the urban poor, Savitribai Phule Balika Shiksha Madad Yojan for giving financial support to school-going girls, and Mahamaya Garib balika Ashirwad Yojna for opening a fixed deposit for new-born girls belonging to BPL families.

The purpose of some of these schemes is similar to announcements made by the Samajwadi Party during the election campaign. Therefore, in all probability, such schemes will be tweaked and relaunched under new names, as has happened with the Ambedkar village development scheme. The decision to abolish reservation for SC and ST in government contracts was taken to promote competitive bidding and ensure quality.

Highrises planned at 20 slum sites

The Delhi Development Authority (DDA) has floated tenders for hiring consultants to initiate in situ rehabilitation — situated in the existing place or position — of 20 slum clusters in the city.

Work has already begun in Kathputli Colony in West Delhi under a public-private partnership and tenders will soon be floated for construction of multi-storeyed blocks in Kalkaji. Slum clusters at Kusumpur Pahari near Vasant Kunj, Ashok Vihar and Shalimar Bagh will form part of the project.

People living in slum clusters in A-14 Kalkaji will be rehabilitated in multi-storeyed buildings that will be constructed in an adjoining open area. As many as 8,000 slum dwellers will be rehabilitated under this scheme.

“We are going to take up in situ rehabilitation in Kalkaji and tenders are likely to be floated soon. We will also be hiring a consultant to study in situ rehabilitation of 20 slum clusters in Delhi. This is the first time that such a project has been initiated in Delhi,’’ DDA spokesperson Neemo Dhar said.

The Kalkaji project is going to be taken up in two phases and each building will have 15-16 floors. Vertical growth is being encouraged in such projects.

“In Phase I, rehabilitation of 3,000 slum dwellers will be taken up. Flats will be constructed and tenders will involve coming up with architectural designs for the project. The approximate cost of this project is likely to be Rs 205 crore which will be borne by the DDA. A decision has to be taken on Phase II, on whether it will be under the the PPP mode or done by us,’’ a DDA official said. “The prices of these flats are being deliberated upon.”

To encourage private players to take up such projects, a certain percentage of commercial exploitation of land along with development of high-end housing on the same plot will be permitted. This has been done in the case of Kathputli Colony near Shadipur depot.

“This project is being looked at as the first of its kind in situ redevelopment project. At Kathputli Colony, it is spread over 5.22 hectares. The project envisages construction of 2,800 EWS units for the squatter families of Kathputli Colony. This will act as a pilot project in Delhi,’’ the official said.

“The project will have a 10 per cent commercial component. Transit camps for shifting slum dwellers are being constructed at Anand Parbat. Around 1,100 people will be put up there. Another plot has been identified and 600 more transit accommodation will be made there. We still have to identify land for transit accommodation for the remaining 1,100. We hope that shifting takes place in six months,’’ the official said.

Government seeks information on land allotment during Mayawati rule

Government seeks information on land allotment during Mayawati rule

NOIDA: Further tightening its noose on the ‘questionable’ actions and deals by the former BSP regime, the SP-led government has asked for details of some key land allotments in Noida during Mayawati’s tenure. The Noida Authority has received a letter from the government, asking it to be submit all the particulars by May 16.

The UP government plans to take action if any irregularities are found in the allotment of land under different categories like commercial, group housing and others. The recent visit by UP’s industrial development commissioner for reviewing various projects has expedited the collection of data. Details of the allotment process and rate have been demanded. Beneficiaries of non-transparent allotment of land in prime locations in Noida are also under the government’s scanner. These include a hotel in Sector 37, which has allegedly been built on gram sabha land, besides several other mega-projects involving builders’ nexus with the former government.

On Friday, the Noida Authority CEO, Sanjeev Saran, had directed that a committee be formed to probe allegations of corruption in sanctioning of nearly 150 projects over Rs 700 crore, which were all cleared during former CM Mayawati’s regime.

Saran had asked the committee to investigate all the projects worth more than Rs 1 crore, which were sanctioned up to December last year.

नोएडा में महंगी हो सकती हैं जमीन

नोएडा में महंगी हो सकती हैं जमीन

नोएडा ।। नोएडा में अथॉरिटी जमीन के रेट बढ़ा सकती है। इस मुद्दे पर अगले कुछ दिनों में बजट बैठक में प्रस्ताव लाने पर विचार चल रहा है। अथॉरिटी के आधिकारिक सूत्रों का कहना है कि चूंकि हाईकोर्ट के आदेश पर किसानों को 64 पर्सेंट अतिरिक्त मुआवजे का पेमेंट किया जाना है। इससे अथॉरिटी पर कम से कम साढे़ तीन हजार करोड़ का अतिरिक्त बोझ पड़ने वाला है। इसके अलावा किसानों को हर साल 1 अप्रैल से नई दरें भी दी जानी हैं। इस लिहाज से प्लॉट अलाटमेंट की दरों में बढ़ोत्तरी किया जाना जरूरी है।

वहीं इसके विपरीत कुछेक अधिकारी जमीन की दरें बढ़ाने के तर्क से सहमत नहीं है। उनका कहना है कि ज्यादातर बिल्डरों के 2 साल का मोरेटेरियम पीरियड समाप्त हो चुका है। बिल्डरों से वसूली में अथॉरिटी सख्ती बरते तो उन्हें जमीन की दरें बढ़ाने की जरूरत ही नहीं पड़ेगी। जानकारी के अनुसार नोएडा अथॉरिटी ने जमीन की दरें पिछले साल 23 मई को बढ़ाई थी। तब अथॉरिटी ने 10 पर्सेंट के करीब दरें बढ़ाई थी। ग्रुप हाऊसिंग की दरें भी 10 पर्सेंट के करीब बढ़ी थी। चुनाव को ध्यान में रखते हुए अथॉरिटी ने पिछले 6 महीने से कोई स्कीम लॉन्च नहीं की है। किसानों की एक स्कीम जरूर अक्टूबर में लाई गई थी। इसमें सारी प्रक्रिया अभी तक अधर में लटकी हुई है। जनवरी में अथॉरिटी ने बजट की सारी तैयारी पूरी कर ली थी। चुनाव आचार संहिता लागू होने के कारण इन तैयारियों पर मात्र चर्चा ही हो सकी।

आधिकारिक सूत्रों ने बताया कि अथॉरिटी ने 64 पर्सेंट मुआवजे की रकम देने के लिए बजट में 1500 करोड़ का प्रावधान किया था। अब चूंकि प्रदेश में सरकार बदल चुकी है लिहाजा सरकार की प्राथमिकताएं भी बदली हैं। जैसे शुक्रवार को प्रदेश सरकार ने माया सरकार की 46 प्रोजेक्ट कैंसल कर दिए। जनवरी में हुई बजट बैठक में माया सरकार के प्रोजेक्टों से जुड़े खर्चों का प्रावधान रखा गया था। अब इनकी नए सिरे से समीक्षा होनी है। सूत्रों ने बताया कि नोएडा अथॉरिटी जमीन के रेट बढ़ाने की इच्छुक है। इसके पीछे तर्क कुछ नए प्रोजेक्टों को लागू करने का भी है। इनमें यमुना नदी पर नए मेट्रो टै्रक का निर्माण , यमुना नदी पर 2 नए पुलों को बनाने की तैयारी , राष्ट्रीय राजमार्ग नंबर 24 के आसपास अंडरपास व क्लोवर लीफ के निर्माण पर होने वाले खर्च के साथ ही किसानों को दिए जाने वाले मुआवजे के प्रावधान को ध्यान में रखा जा रहा है। अथॉरिटी में बोर्ड की ओर से तय नियम के अनुसार समीक्षा कर हर साल 1 अप्रैल से अधिग्रहीत की जाने वाली जमीन की दरों में बढ़ोत्तरी की जाती है। यह बढ़ोत्तरी मूल्य सूचकांक के आधार पर होती है।

-Navbharat times

Cities need money, and managers

India’s cities are growing in size and so are the numbers of inhabitants. The demands on the urban envelope are only increasing by the day and in terms of sheer numbers, it is quite mind boggling. While cities contribute greatly to the growth of the economy, they receive little attention in terms of financial allocation.

Cities are cared for by municipal bodies, who provide for and maintain public goods and services that cater to the needs of the urban dwellers. Municipal functions cost money, which for municipalities is always limited and results in poor upkeep of the city and also do not provide adequately for future development.

FINANCES, THEN & NOW

Traditionally, municipal taxes have been the mainstay of finances for cities. One of the primary methods of mobilising revenues is levying property tax, along with other taxes. Even today, property tax happens to be the chief source of finance. There are, however, issues with it. One, determining the amount of tax to be collected is a vexatious issue and often attracts a high volume of litigation. Two, a large number of properties get exempted on account of the populist nature of the organisation; it is an elected local government where the municipal councillors do not want to become unpopular with the vote bank. Three, the collection machinery is far from efficient and taxes are not collected properly. Four, buoyancy is absent and tax rates do not increase with time and are not linked with increase in the cost of service provision.

The revenues collected as property taxes are just not sufficient to meet the costs of service provision, particularly given the increased standards demanded by citizens. The result is deficiency of performance and poor delivery.

Thanks to the finance commissions, both at the central and state levels, there is an alternative channel of fund flow. But here again, there are limitations on the amount of money that can be shared by the national and state governments with the local government. Often, fund allocations are politically coloured and not always in the best interest of municipal bodies. While this source has certainly added to the coffers of the municipal bodies, their pockets continue to be shallow and money is still a problem.

Recently, municipal bodies have also issued bonds to raise capital. While it is easy to raise money from deep discount bonds, the challenge is to invest it in commercially viable projects so that after returning the money with interest to the investors, the municipal bodies have a neat profit. Only then will this model work.

At this point, it is premature to evaluate municipal bonds as a revenue resource for a lot of them issued by various municipalities are yet to reach the maturity period. Only a few cities such as Bangalore, Ahmedabad and a cluster of smaller cities such as Tiruppur in Tamil Nadu have gone in for this route.

The bond market appears to be a rather difficult route for mobilising resources as it demands a high degree of financial acumen on the part of a municipal body to implement this.

EFFECTIVE MANAGEMENT

Using the private sector is yet another way for municipal bodies to effectively use resources. Instead of increasing staff salaries and perks, one can hive off certain activities to the private sector. Examples of this abound in various cities and towns of India. Chennai and Bangalore have outsourced garbage collection and disposal to private companies. Traffic islands and median dividers on roads are being beautified and maintained by large corporations as part of social responsibility initiatives. Several cities have outsourced street light maintenance. In some parts of Bangalore, Infosys Foundation is also contributing to the maintenance of public toilets.

Several international donor agencies have been giving grants to municipal bodies for the last several decades. A lot of money has been pumped in to civic infrastructure and slum development. Unfortunately, either these efforts are too little, or the end products are of poor quality with little attention given to maintenance. Therefore, one may quite end up from where one started.

The central government decided to bring about a quantum leap in the situation by providing huge grants under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), which was to have been implemented in 65 cities. While the period of implementation is complete, the story leaves many gaping holes within. Huge amounts of funds that were actually available were not accessed by the municipal bodies for a variety of reasons: lack of capacities in preparation of required documentation, inability to progress on funds already accessed and thereby not being able to get further instalments of promised grants.

Often, we find that money is spent on the same project multiple times. This is primarily because of lack of proper quality management in the projects. What is built today is broken soon and a lot is spent in repairing it. In a proper system, once infrastructure is put in place, it should last over its life cycle with minimal maintenance. This never happens. Further, we have situations like a road is first laid, and no sooner the tar gets dry, than it is dug up to repair the sewer line or the water line.

Technology is another area where municipal bodies are very weak and most of them invariably lag behind. For instance, the mere replacing of old water pumps by modern power saving pumps can result in huge savings in electricity bills.

Staffing is a critical area where a lot of money can be saved. Municipal bodies usually have a large number of personnel on their salary rolls, many of them hardly contributing. The right kind of human resource, rather than numbers, is what is needed.

UNLOCKING VALUE

One of the oft voiced complaints from municipal finance analysts is that land development has been kept out of the purview of municipal bodies and that it is the development authorities who make all the money at their expense. What they do not realise is that municipal bodies have a huge portfolio of properties which are of very high value. All they need is to unlock the potential of their real estate portfolio and they will have all the finances they need for a long time to come.

For instance, most of the shopping malls in Hong Kong are owned not by private entrepreneurs but by the Hong Kong Housing Development Authority. Municipal property portfolio management holds a huge potential for financial re-engineering so that not only does the city get good quality infrastructure, the municipal body also gets a steady source of income which is also buoyant and can budget for inflation.

What is woefully lacking is that both at the elected as well as the executive level, is vision, financial planning and management skills, corporate management capabilities and appreciation of technology to change ways of orthodox working. Wherever municipal bodies have attempted reform in this direction, they have seen that efficiencies improve and it is a win-win for all.

Mere infusion of funds, without work culture churn, overhaul of systems, procedures and practices and structured and strategised financial management, will do more harm than good and can never solve problems of the citizens.

Timely approvals may bring down housing costs: Selja

The government has formed a committee to evolve a workable strategy for reducing the time taken in approval of real estate projects which could ultimately reduce the cost of houses by 25 to 40 per cent, Minister of Housing and Urban Poverty Alleviation Kumari Selja said on Friday, May 11.

The Committee under chairmanship of Dhanendra Kumar, former Chairman of the Competition Commission of India, will submit its report in four months, she said while addressing a conference on affordable housing organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“It is estimated that the cost to ultimate consumer could be 25 to 40 per cent lesser if the time of granting approval is reduced to six to eight weeks, which is quite achievable in the present day and age,” said Selja.

Leading real estate developers say about 70 approvals are required for a typical housing project which take nearly three years. The lack of coordination among multiple government agencies and delays result in higher costs which are passed on to the consumer.
The minister said the government has formulated a draft Real Estate Regulation and Development Bill for orderly growth of the sector. Besides, the recently-established Credit Risk Guarantee Fund Trust is coming up with a scheme to provide loans up to Rs five lakh for low income housing.

“The initial corpus of this fund will be Rs 1,000 crore and we hope it will catalyse about Rs 20,000 crore of affordable housing credit,” said Selja.

The Union Budget for 2012-13 has allowed external commercial borrowings which will lower interest cost for developers and ensure better capital availability for low-cost housing, she said.

Arun Kumar Misra, Secretary at the Ministry of Housing and Urban Poverty Alleviation, said private sector can a crucial role to play in expanding the concept of affordable housing. There are, however, demand-side and supply-side constraints at present due to lack of bank credit.

Naveen Raheja, Chairman of ASSOCHAM real estate committee, said the shortage of dwellings in urban India is estimated to be 25.5 million units. The poor form 90 per cent of this shortage.

“For affordable housing, partnerships may be forged among the central government, state governments, urban local bodies, people’s cooperatives and the private sector,” he said adding the definition of affordable housing should be clearly defined.

Affordable housing is generally defined as a dwelling unit of 300 square feet for economically weaker sections with annual income level of Rs 1.5 lakh and 300 to 600 square feet for lower income group with annual income of Rs 1.5 lakh to Rs 3 lakh.

ASSOCHAM Secretary General D.S. Rawat said housing for all remains a key priority in India’s development agenda. “Low-cost housing offers a world of opportunities to the real estate development business that can bring in much-needed resilience to the sector.”

Others present were Susheel Kumar, Joint Secretary at the Ministry of Housing and Urban Poverty Alleviation, R.V. Verma, Chairman and Managing Director of National Housing Bank, Ashok Khurana, engineer member at the Delhi Development Authority, and Sunil Dahiya, Co-chairman of the ASSOCHAM real estate committee.

They said urban infrastructure is coming under tremendous pressure with rapid economic and industrial development across the country. While some of these are gradually being mitigated, concerted efforts are required by multiple institutions to facilitate mass development in the sector.

According to 2011 census, the country had a population of 1.21 billion of which 377 million or 31.16 per cent lived in urban areas.