- to expand infrastructure facilities in rural and urban areas in order to improve the environment of human settlements, increase the access of poorer households to basic services and to increase the supply of developed land for housing;
- to undertake, within the overall context of policies for poverty alleviation and employment, steps for improving the housing situation of the poorest sections and vulnerable groups by direct initiatives and financial support of the State;
- to help mobilise resources and facilitate expansion of investment in housing in order to meet the needs of housing construction and upgradation and augmentation of infrastructure; and
- to promote a more equal distribution of land and houses in urban and rural areas and to curb speculation in land and housing in consonance with macro-economic policies for efficient and equitable growth.
14.4.3 In the following sections the critical areas under the NHP relating to (i) supply and management of land; (ii) rural housing; (iii) legal and regulatory framework and (iv) housing finance are discussed.
Supply and Management of Land 14.4.4 Inadequate and inequitable supply of serviced land particularly in urban areas has been the most significant bottleneck for the promotion of housing activities and urban development at large. The aspect of supply and management of land needs to be viewed both from a larger dimension of regional development and city/town level growth. It would imply that all development in city/region should take place within the framework of a comprehensive development plan with spatial linkages and with planned provision of basic services. At the local level, an appropriate policy package incorporating the following is envisaged: (i) control of unregulated peripheral development on agricultural lands; (ii) optimising overall land use; and (iii) appropriate urban redevelopment policy.
Rural Housing 14.4.5 The two central measures with regard to rural housing are:
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a) Promoting use of local building materials and technologies suited to different geoclimatic regions and preventing indiscriminate and commercial exploitation of such materials;
b) Creating an enabling environment for primarily self- help housing including new construction, additions and upgradation by the rural people through enactment and effective implementation of laws for conferment of homestead rights and provision of house sites with minimum infrastructure.
A few other specific measures suggested as a part of NHP are :
i) Prevention of alienation of homestead on tribal lands;
ii) Avoidance of unnecessary displacement of rural settlements due to developmental projects;
iii) Rehabilitation of households affected by natural calamities;
iv) Rural housing/development agencies for supply of credit and materials on flexible terms suitable to local requirements;
v) Giving special attention to the needs of Scheduled Castes, Tribes and other disadvantaged groups;
vi) Linking Rural housing with the programmes of IRDP and JRY for accentuating the pace of rural housing and also other related programmes of asset creation and employment generation; and
vii) Setting up of a suitable institutional structure for strengthening existing rural development agencies at State, district and local level to meet the needs of the housing sector.
Legal and Regulatory Framework 14.4.6 Creation of appropriate legal and regulatory framework is perhaps the most important contributing factor for enhancing supply of land and housing. The NHP has taken cognizance of it while specifying measures under each component (eg. Rural Housing, Supply and Manage- ment of Land). Specified measures suggested in draft NHP are: -
i) Provision in the land reforms and other relevant acts for conferment of homestead rights to the occupants, and ensuring proper rehabilitation of those dehoused;
ii) Review of slum improvement laws to provide for conferment of occupancy rights;
iii) Revision of Master Plan standards, building byelaws, laws and infrastructural standards to reduce cost of land and construction and promote low cost materials and technology;
iv) Amendments to the Land Acquisition Act for quick acquisition of land in public interest and negotiated compensation to the landowners, delinking provision of land from determination of compensation;
v) Amendments to Urban Land (Ceiling and Regulation) Act, to remove inhibiting effects of legislation on enhancing supply of land without diluting its social purpose and also as a specific measure, imposing vacant land tax;
vi) Amendments to Rent Control Laws to promote investment in rental housing; and
vii) Procedural simplification measures including building approval procedure, flexible collateral requirements, amendments to NHB Act to provide for speedy foreclosure of mortgages of HFIs refinanced by NHB and introduction of a secondary mortgage system.
Housing Finance 14.4.7 The measures to be taken with regard to housing finance are as under:
a) Evolving, over a period of time, a non-subsidised housing finance system recognising the integral linkages of the housing sector with the rest of the economy.
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b) Targetting of the available capital and interest subsidies to rural and urban poor.
c) Introduction of innovative savings and lending instruments to help integrate the housing finance system into the capital markets, by enabling RFIs'access to the funds on a competitive basis with other financial insti- tutions.
d) Creating innovative banking/institutional arrangements to cater to the housing credit needs of low income groups in the informal sector through community based system.
e) Creation of a suitable environment for developing a secondary mortgage market in order to attract funds from a wide range of investors, including insurance and provident/pension funds and to integrate housing finance with the overall financial system.
The Perspective 14.5.1 According to the estimates made by the Sub-Group on the "Magnitude of Housing Problems" 64.4 million new houses will be needed by 200 1. Besides in 1981, there were 14 million units needing upgradation, 1.23 million requiring renovation and 7.5 million needing extension/expansion. To achieve the goal of elimination of houselessness by the turn of the century, it would be imperative to step up investment, public and private in housing.
14.5.2 Taking into account the availability of physical inputs, the Sub-Group had concluded that it would be feasible to construct 21.77 million units with an investment of Rs.77,590 crores at 1989-90 prices during 1990-95. For the same number of units assumed for 1992-97, the investment requirement would be of the order of Rs. 97,530 crores at 1991-92 prices. Table-5 gives the break-up of the physical target for upgradation of existing stock and creation of new stock in rural and urban areas alongwith the
Table - 5 Physical Projections and Financial Requirements
(According to Sub-Group on Magnitude of Housing Problem)
(units in million, Amount in Rs. Crores)
Rural Urban Metro Total
No. of Amount No. of Amount No. of Amount No. of Amount
Units Units Units Units
I Upgradation 4.07 1,970 1.75 1,130 5.82 3,100
II New Stock
EWS 6.45 6,765 2.17 5,245 1.18 3,810 9.80 15,820
LIG 1.34 4,340 1.90 6,150 1.04 5,020 4.28 15,510
MIG 0.25 2,445 0.58 5,580 0.31 5,060 1.14 13,085
HIG 0.10 4,280 0.40 16,305 0.22 8,880 0.72 29,465
Total 8.15 17,835 5.05 33,280 2.75 22,770 15.95 73,885
I & II 12.22 19,800 6.80 34,410 2.75 22,770 21.77 76,980
Houseless 610
Total (1989-90 prices) 77,590
Total (1991-92 prices) 97,530
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corresponding financial requirements. If adjustment for 1991 actual population and projected urban population for the year 2001 is made, the target for urban areas will require to be marginally reduced with corresponding increase in rural areas. The requirement of investment in housing (public and private) works out at 12.2 percent of the total outlay during Eighth Plan.
14.5.3 As against the projected requirement of Rs.77,590 crores for housing during 1990-95, the overall flow from the formal sector as per existing norms is estimated at around 16 per cent and the Sub-Group on Housing Finance had recommended that the credit support may be increased to at least 20 per cent. It is expected that a large part of the credit flow from the formal sector would come from LIC followed by the commercial banks and provident funds. The total flow of credit from the formal sector during the Eighth Plan is projected in the range of Rs. 20,000 to Rs. 25,000 crores (at 1991-92 prices).
Core Strategy of Eighth Plan 14.6.1 In line with the National Housing Policy which is a statement of the long term objective, the core strategy of the Eighth Plan consists of creating an enabling environment for housing activity, viewed as an important component of the national economy, by eliminating various constraints and providing direct assistance to the specially disadvantaged groups including rural and urban poor households, SC/ST, physically handicapped, widows and single women. The first objective is intended to be achieved through a set of sub- tasks or instruments as specified below:-
a) Expand the provision of basic infrastructure facilities in rural and urban areas in order to improve the overall environment of habitat and enable appropriate conditions for the majority of the households to have access to housing;
b) Remove major legal constraints to increase supply of serviced land as well as rental housing by way of substantially amending the existing statutes like Urban Land (Ceiling and Regulation) Act, Land Acquisition Act, Transfer of Property Act and Rent Control Act;
c) Provide stimulus and support for housing on expanded scale through enhancing the flow of credit both by way of mobilisation of additional resources for housing by tapping capital markets and additional savings and by directed credit from public financial institutions. The Planning Commission had set up a Working Group on Finance for Housing sector for the Eighth Five Year Plan (1992-97) to consider ways and means to step-up flow of institutional finance to the housing sector. The group has made a number of recommendations in its report including projection of flow of credit from various financial institutions and HFIs and greater acess of EWS rural households to the institutional credit. Fiscal incentives, procedural simplification and setting up of a wider network of HFIs particularly in remote areas will act as enabling factors to achieve the objective.
d) Role of private developers in fringe area development of' metropolitan region/large cities, while keeping safeguards including environmental standards for the majority of present residents, not only in housing but also in trunk infrastructure needs to he explored;
e) Promote use of low cost building as well as shelter and cost effective technologies intended for both saving in use of scarce resources like brick, cement and steel and provision of affordable housing to poor segments of population;
f) Promote self-help housing as well as shelter upgradation, which is as important as creation of new housing stock, by providing better access to finance, land, materials and technology through appropriate delivery systems to the poorer segment of the rural population;
g) Establish links between formal and informal credit network including community level association and voluntary agencies operating in the housing sector;
h) Provide financial and institutional support, through both formal and informal systems
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to environmental improvement and in-situ upgradation programme in the slum areas and other low income congested pockets in urban areas; and
i) Establish an effective Management Information System for housing and urban infrastructure accessible to both private and public development agencies With regard to the second objective of direct assistance to disadvantaged groups;
j) Evolve special assistance programme in the form of subsidy preferably in kind, differential rate of interest and delivery support system for specially disadvantaged groups including vulnerable sections of SCs/STs, widowed women of poorer sections of the society and also those affected by natural calamities. Such assistance should include both in-situ upgradation and new sites and house construction.
Eighth Plan Priorities And Programmes 14.7.1 The most significant aspect of the Eighth Plan, compared to the Seventh Plan, in respect of housing sector is that it is set against a definite National Housing Policy. Thus, the priorities and programmes of the Eighth Plan are to be viewed as a sub-set of the long-term policy document. Two other related dimensions that need to be taken into account are: the focus on liberalisation of the economy in the recently announced macro economic policy and directed attention to rural housing.
14.7.2 With the above mentioned thrust areas, the important programmes in the housing sector are described in the following sections. Some of the programmes overlapping with urban development and water supply and sanitation sectors, e.g. NRY, Environmental Improvement of Urban Slums (EIUS), Low Cost Sanitation Programme need to be cross referenced.
Rural Housing
House Sites and Construction Assistance 14.7.3 The scheme was included in the State Sector as a part of MNP and formed the core of the rural housing programme during Seventh Plan. This scheme has two components provision of free House Sites and construction assistance with varying proportion of subsidy and loan in different States. Construction assistance is planned to benefit 3.5 million families directly as part of MNP. This is exclusive of other special rural housing programmes intended for specific beneficiary groups.
14.7.4 While the scheme will be continued in the Eighth Plan, it would be appropriate to take up fresh surveys and enumeration of the landless families to assess the need for continuing the scheme in the light of the fact that at the beginning of the Seventh Plan, as against the balance of 13.67 lakhs identified (in 1971) landless la- bourers and rural artisans, the coverage during Seventh Plan was much higher at 43.21 lakhs. However, construction assistance programme of the component seems to be lagging behind and thus needs stepping up. There is also a need to revise the cost norms of dwellings, the subsidy and beneficiary component of the most of the rural housing schemes of the State Government so as to bring an element of uniformity and achieving the intended coverage of rural households. The following specific measures are suggested during the Eighth Plan:-
a) Construction assistance (subsidy component) to the poorest section of the rural poor should preferably be given in kind supported by an appropriate delivery system covering all regions of the country;
b) All schemes should have loan and beneficiary contribution to promote self-help;
c) This programme should be tied with that of building centres so as to promote low-cost housing and locally available material/apropriate material and technology. Training of masons and other construction workers should be an integral part of this scheme;
d) Innovative housing finance system should be set up in rural areas and more difficult regions like North Eastern States not only for facilitating supply of credit but also to mobilise the rural savings.
Indira Awas Yojana (IAY) 14.7.5 The Indira Awas Yojana. was introduced in the Central Sector in 1985-86 as part of the Rural Landless Employment Guarantee
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Programme and has continued as part of JRY. The objective was to enable the construction of houses for SCs/STs and freed bonded labourers based on the wage-employment programme.
14.7.6 The endeavour during the Eighth Five Year Plan period will be towards evolving an approach to rural housing which leads to setting up of truly integrated micro-habitats and address this scheme to specially disadvantaged group including the poorest segment of SC/STs and freed bonded labour.
Housing and Urban Development Corporation (HUDCO) 14.7.7 HUDCO was incorporated in 1970, with the mandate to ameliorate the housing conditions of low income and weaker sections. HUDCO finance is available to institutions like State Housing Boards, Development Authorities, Improvement Trusts, Cooperative Societies etc. HUDCO is earmarking 55 % of its sanctions for EWS and LIG housing projects and balance 45% for MIG, HIG, rental and commercial housing projects. HUDCO is the only national agency with predominant consideration for EWS both in terms of loan operations and design/technology adoption.
14.7.8 HUDCO is supporting the State Plan programme in housing and urban infrastructure sector through the following broad components:
a) Rural housing;
b) Urban housing;
c) Slum upgradation; and
d) Urban infrastructure schemes.
14.7.9 HUDCO has been getting equity support from the Government of India. Upto the end of Seventh Plan period, the equity support to HUDCO by the Government totalled Rs. 457.77 crores and another Rs. 46 crores during 1990-91 and 1991-92. The subscribed capital upto No- vember 91 was Rs. 165 crores. HUDCO has also built up reserves and surpluses. In addition to this, HUDCO has been getting funds from LIC, GIC, UTI, and NHB. HUDCO has been permitted to raise funds through tax free bonds from time to time.
14.7.10 From 1989-90, HUDCO is undertaking lending for the following Plan schemes:
a) Shelter Upgradation Component of Nehru Rozgar Yojna.
b) Low Cost Sanitation Scheme for Liberation of Scavengers.
c) Night Shelter Scheme for Pavement Dwellers.
The subsidy component in case of the above mentioned schemes is also being routed through HUDCO, so that loan releases can be linked with the release of subsidy. The total amount sanctioned for the schemes between 1989-90 to 1991-92 (upto October 1991) are given below:
Table - 6
Name of Scheme Loan Sanctioned
(Rs. in crores)
a) Shelter Upgradation 196.00
component of NRY
b) Pavement Dweller/Night 2.27
Shelter Scheme
c) Low Cost Sanitation 155.79
Scheme