By RV Verman
Indian Union Budget 2021-22: While listening to the Union Budget speech 2021-22 of the finance minister, I was recalling American sociologist Matthew Desmond’s quote “…. A national affordable housing programme would be an anti-poverty effort, human capital investment, community improvement plan, and public health initiative, all rolled into one,” and wondering if this year’s Budget was a missed opportunity, also hoping nevertheless that more announcements could come in course of the year.
Housing is undeniably the most universal product, an integral part of the economy, polity and the social milieu, touching all aspects of human life and involving several sectors, including commercial and social. Given the current state of the economy, a renewed thrust on affordable housing was expected in the Budget, which seemed terribly missing. Beyond giving priority to affordable housing, and (implicitly) recognising the vital role and contribution of the sector to the larger economy in terms of GDP and employment, the Budget offers precious little for the sector.
The FM routinely extended by one year, the tax exemption on interest up to `1.5 lakh against individual housing loans (demand side), and on notified affordable housing projects (supply side). These measures seemed more like a ritual than any conscious serious design for reviving and supporting the cause of affordable housing for the masses and flow of resources into the sector and construction industry. The approach seemed pretty casual and almost unbelievable, considering that the deadline year for the government’s flagship programme “Housing for All by 2022” is only a year away. So much more could have been done.
Housing offers enormous opportunities for pump-priming growth in terms of GDP, employment and boosting social sectors. All of these are the pressing needs in present times, and hence a renewed thrust on housing would have gone a long way in promoting growth and development in the post-pandemic years.
India is on the path to rapid urbanisation. Migration to towns and cities is a continuous phenomenon, which keeps adding to the city population. A large number of the migrant population end up in slums, existing or new informal settlements, in the absence of any formal housing solution. In this background and learning from the pandemic, the Union Budget does reiterate the government’s intent to promote, facilitate and catalyse rental housing for migrant labourers in urban centres. This is certainly is a welcome move and will generate confidence among all stakeholders, specially the migrant labour force. The corporate employers should be made to play a key role in this Initiative in terms of coordination, facilitation and financing.
With interest rates ruling in the lowest ever range, the buyers and home seekers will prefer to come out in the market, provided the supply of affordable housing meets their expectations.
Bigger fiscal Incentives on the supply side such as exemption on construction income for the builders, production-linked incentive, promoting use of efficient technology, all of these resulting in cost reduction for the buyers, were the need of the time. While housing is a key driver of growth and investments, yet, housing shortage in the country continues to be a challenge, requiring huge order of investments.
On a positive note, the Budget has reiterated the government’s intent of according priority to housing in the bigger map of urban, city and regional planning, which can make settlements more inclusive, eco-friendly and sustainable.
The author is chairman, NHB
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