NEW DELHI, Dec 7:
Stressing the need for addressing housing shortage in the country, President Pranab Mukherjee today asked banks and the private sector to find ways to help economically weaker sections who are worst affected as they find it difficult to access credit.
“On the basis of the 2011 census, a technical group set up by the Ministry of Housing and Urban Poverty Alleviation has estimated that the total shortage in housing is 18.78 million in 2012 and of these 95 per cent is in the economically weaker sections and low income groups,” Mukherjee said.
“Approximately 25 per cent of the urban population is living in slums and squatter settlements,” he said addressing a convention organised by National Real Estate Development Council.
He said that the government is seized of the reality and is trying to make a difference through the Rajiv Awas Yojana.
“The private sector has to take more initiative to find sustainable solutions,” he said, adding that the affordable housing segment should be made attractive to the private sector through direct and indirect incentives.
Mukherjee said that there are major problems that affect the efforts of the low income groups in becoming home owners, of which the difficulty in extending credit to this segment through the banking channel is most significant.
“While the high income group and middle income groups have been able to reap the benefits of the low rate mortgage loans and deductions available under the Income Tax Act and home loan disbursement has gone up many fold, the economically weaker sections and the low income households have been left behind,” he said.
“Banks are reluctant to lend to them because of the perceived risk of the loan to them becoming non-performing assets. I am confident that banks would rise to the occasion to face challenge and evolve innovative methods to allow greater credit flow to this segment,” he added.
Mukherjee said that the economically weaker sections provided services as drivers, maids and other jobs without which urban lifestyle would not be healthy.
He said that another challenge that the housing sector faced was the shortage of land and both government and private sector should look at ways to augment land supply.
The President said that one way to do this was to look at land acquisition in adjoining areas and then join them with city centres through mass transport infrastructure.
“I am aware that there are many challenges associated with land acquisition, township planning, project approval, construction and transfer of assets to beneficiaries. There is a need to look at the systems in place and provide solutions to make the dream of providing houses to the economically weaker sections of the society a reality,” he said.
Mukherjee said that the housing and the real estate sector holds the key to the economic prosperity of the country because of its backwards and forward linkages to the other sectors of the economy.
Having grown nearly 32 per cent in the decade ending 2011, the urban population is expected to be around 600 million by 2030, in a century which would see a majority of the people in the world living in cities, he said.
The urbanisation phenomenon involved is virtually unstoppable particularly in India which is one of the fastest growing economies of the world, he noted.
Mukherjee said to manage and reap the benefits of urbanisation, it is imperative that the basic urban infrastructure such as housing, roads, water, electricity, sewage, sanitation, transportation, education and health care in city regions is provided.
“We have several large cities such as Mumbai, Delhi, Chennai and Kolkata. Neglect of such concentrations can result in urban chaos leading to deceleration in economic growth and law and order problems,” he said. (PTI)
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