My Dream - Rural & Semi Urban Housing

Housing is one of the most serious challenges facing India’s socio-political economy today. While food security has been largely achieved and clothing today is not a serious problem for the poor, shelter remains beyond the reach of millions in India even after 50 years of the country’s independence. This is a matter not merely of deep concern but also a matter that requires immediate attention and urgent action. For a normal citizen, owning a house provides significant economic security and status in society. For shelter less persons, a house brings about a profound social change in their existence, endowing them with an identity, thus integrating them with their immediate social milieu.

According to the 1991 Census, the rural & semi urban housing shortage was 13.72 million consisting of 3.41 million households without houses and 10.31 million living in unserviceable kutcha houses. These figures will grow with population growth over the years. The major factors which had affected growth of rural 7 semi urban housing are lack of government support, negligible presence of housing finance institution and apathy of organized real estate players. However off late government has recognized this and It has announced a National Housing and Habitat policy which aims at providing ‘Housing for All’ and to facilitate construction of 13 lakh additional housing units in rural areas annually with an emphasis on extending benefits to the poor and the deprived. But still the outreach of housing finance institutions in the rural and semi urban areas is negligible. There is virtually no institutional finance going in for the creation of infrastructure support services in the rural and semi urban areas.

The challenges for housing finance institutions to fund rural and semi urban housing are to make credit scoring model for targeted borrower as this segment of population generally do not have credit history and to get clear title for creating lean mark on property. Organized real estate players are not keen to foray on semi urban housing as they would find it difficult to mobilize capital for execution of projects due to lack of interest from financial institution and real estate funds. On the other side sale of property would again be impacted due to lack of credit.

In spite of challenges I can clearly see huge opportunity for every one be it consumer, housing financial institution, real estate funds and developers provided government adopt a multi-pronged approach of evolving strategies for extending the outreach of housing finance in the rural areas, sourcing of capital from both internal and external sources and the development of a menu approach for housing and habitat development.

To promote more participation of housing finance companies Real Estate Funds may closely work with National Housing Bank and Housing Finance Companies to facilitate policies and credit scoring model which suits rural and semi urban housing. The enhance credit flow will definitely generate interest in developers as urban housing is becoming overcrowded and land prices are souring, which is putting pressure their profitability. To facilitate this Industry have to make recommendations to government for forming an apex body, which would act as regulator and protect consumer’s interest and also facilitate induction of Science and Technology inputs on a continuous basis into the sector for low cost housing.