1.

Abstract:
According to Census of India-2011, for the first time since independence, the absolute increase in
population was more in urban areas than that in rural areas. While the Rural-Urban population
distribution was still 68.84% & 31.16% respectively, the share of Rural population had declined from
72.19% to 68.84% from the previous census.

The increasing urbanization led by the migration of rural population to urban centers & natural growth
of the cities posed another challenge, the already congested urban infrastructure would have to house
and share the limited resources with a higher number of citizens.

Migrants coming to urban centers were largely looking for better employment opportunities and
belonged to Economically Weaker Section (EWS) and Low-Income Group (LIG) of society. These
migrants had to be housed in the urban centers & be provided a quality life thus leading to a demand
of low-cost housing or “Affordable Housing”.

Basis the various studies conducted on the housing needs of the masses, in June 2015, the
Government of India approved a national housing program called the Pradhan Mantri Awas Yojana
(PMAY; Prime Minister’s Housing Plan).

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 2. Various Parameters of Identifying Affordable Housing:
There is no clear & concise definition of “Affordable Housing”. In a general sense, it could be defined
as the real estate inventory aimed to provide housing to those whose income levels are below national
median income.

Considering the number of factors affecting the affordability of a dwelling unit and variety of contexts
which may or may not result in a housing unit being identified as an affordable housing unit, different
stakeholders have defined the parameters of an affordable unit differently. Some of the most followed
parameters for affordable housing are as follows:

Affordable Housing in Partnership – Scheme Guidelines Dec. 2013 by MoHUPA

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 3. Initiatives to Promote Affordable Housing
While efforts to provide low cost housing have been made for many years (National Housing Policy,
1994; Jawaharlal Nehru National Urban Renewal Mission, 2005 (JNURM); Rajiv Awas Yojana (RAY,
2013), the Pradhan Mantri Awas Yojana (PMAY) launched in 2015 provides a fresh impetus – the
PMAY-Urban (PMAY-U) subsumes all the previous urban housing schemes and aims at ‘Housing for
All’ to be achieved by the year 2022. The total housing shortage envisaged to be addressed through
the PMAY-U is 20 million.

The PMAY aims to provide assistance to Urban Local Bodies (ULBs) and other implementing agencies
through States/UTs for:

A. In-situ slum redevelopment (ISSR):

• Using land as resource, the scheme aims to provide houses to eligible slum dwellers by
redeveloping the existing slums on public/ private land.
• Under this scheme, a grant of INR 1 lakh per house is provided by the central government to the
planning and implementing authorities of the states/UTs.
• As stated in the PMAY ‘Housing for All’ guidelines, Sale of free component can only be linked to
the completion of the ‘slum rehabilitation’ component. Thus, ensuring that rehabilitation projects
are completed by private developers before they can benefit.

Challenge: housing activists blame this heavy dependence on private developers as the main reason
for the sluggish performance with most private developers carrying out the construction in a very slow
manner.

B. Credit-linked subsidy scheme (CLSS):

• under this scheme, easy institutional credit is provided to EWS, LIG and MIG households for
purchase of homes with interest subsidy credited upfront to the borrower’s account through

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 primary lending institutions (PLIs), effectively reducing housing loan and equated monthly
instalments (EMI)
• As of now, HUDCO, NHB and SBI have been identified as Central Nodal Agencies (CNAs) to
channelize the credit linked subsidy to the lending institutions and monitor the progress of CLSS.
Ministry may notify other Institutions as nodal agencies in future
• The CLSS facility can be availed subject to following:

Condition

The priority order for ownership of the unit and availing the CLSS benefit is as follows:

- Female head of the household

- Ownership jointly in the name of wife & husband
- In case there is no female in the family, the house to be owned by a male

Family should not own a pucca house

Allotment preference should be given to manual scavengers, women, SC/ST and BC minorities,
persons with disabilities and transgender.

C. Affordable housing in partnership (AHP):

• It aims to provide financial assistance to private developers to boost private participation in
affordable housing projects; central assistance is provided at the rate of ₹ 1.5 lakh per EWS house
in private projects where at least 35 per cent of the houses are constructed for the EWS category.
• Facilities such as exemption from cost of purchasable development rights, fungible FSI, Premium
FSI may be exempted for the affordable component

Challenge: The construction by States/UTs/Cities is expected to be done in partnership with

public/private sector. The central assistance however is too low to support construction of houses in
metro cities like Chennai, Mumbai, Kolkata etc. Moreover, states may not even allocate fund for the
construction of these houses and this to a large extent depends on the respective state’s welfare
policy. Political differences between the state and the Centre also is an important factor for the
implementation.

D. Beneficiary-led construction or enhancement (BLC):

• this scheme involves central assistance of ₹ 1.5 lakh per family for new construction or extension
of existing houses for the EWS/ LIG.
• This component applies only to individuals and families who do not fall in any of the other
components or redevelopment plans under the mission.
• The progress of these houses is to be tracked regularly by the authorities with the use of geo-
tagged photographs.

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 4. Stimulating Participation of Private Developers
Through various SOPs offered for promoting affordable housing and current market conditions post
implementation of RERA, Demonetisation and implementation of GST, free markets have been nudged
towards participating in the affordable housing segment.

This is majorly due to steady absorption of inventory in major micro-markets being considered
affordable housing. Private developers are being incentivized through the following:

• Benefit through exemption on Income Tax under section 80IB

• Infrastructure status awarded to affordable housing project which led to low cost of borrowings &
longer tenures on availed credit
• Low cost of approvals, FSI, TDR etc. for affordable housing component in real estate projects
• Regulatory framework being driven to accord approvals to affordable housing projects on priority
• Relaxation in planning norms to increase participation of private developers

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