The past couple of years have witnessed significant project launches in the affordable housing segment in India. One of the major reasons is the global economic slowdown pulling back developers from high margin luxury segment to low margin affordable segment due to volume sales and lesser investment. On the demand front, rising disposable incomes and growing urbanization have further fuelled this growth. Micro financing has helped the developers and consumers avail easy finance without stringent KYC norms of banking entities.
As per Mr. Shushmul Maheshwari, CEO - RNCOS, demand for low cost housing is exorbitant. There is a huge shortfall of nearly 25 Million houses in the country. Government schemes have spurred growth in the affordable housing segment. The Reserve Bank of India has relaxed the norms for external commercial borrowings or ECBs for Housing finance companies for the purpose of on-lending for low cost housing units. Government has recently amended flagship scheme Rajiv Awas Yojna. Similarly, Centre has also improvised the Interest Subsidy Scheme in favor of masses.
However, the major hurdle in low cost housing is the excessive duration of approvals and hassles in procuring numerous approval certifications and clearances. As a ray of hope, some regions have adopted the adored SINGLE WINDOW CLEARANCE which has lead to remarkable cost reduction and convenience. For instance, the state of Punjab has successfully followed the model with successful implementation. On the similar lines, Municipal Corporations of Delhi and Indore have introduced online sanction for building plans and issuing completion certificates. More such developments are expected to improve the housing sector performance in future.
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