Push for affordable housing

Describing the government's decision to provide five per cent interest subsidy on housing loans taken by the economically weaker sections (EWS) as "a move in the right direction", an industry lobby on Sunday said it would boost demand of affordable housing.

“The prevailing high interest rate has dampened the overall demand and has severely affected the affordability, thus making housing a distant dream of a common man,” said Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII).

“The five per cent subsidy approved by the cabinet on Friday for the EWS and LIG (low income groups) is thus a move in the right direction, which will serve the twin objective of providing much needed relief to the general public and at the same time boosting demand in the economy,” Banerjee said.

According to Banerjee, the cost and availability of the land is a major bottleneck in making housing affordable. "There is, therefore, an urgent need to increase the supply of land at affordable prices,” Banerjee said.

“The supply of well-developed and commercially viable land would bring down the prices in the current markets,” Banerjee added.

To achieve this, the CII urged the government to provide infrastructure status to integrated township development, increase the municipal limits of the existing cities, relax floor space index and allocate specific land in any construction plan for the weaker sections.

The CII has also suggested that government should consider either waiving off or substantially reducing the stamp duty for the EWS and also promotion of appropriate low-cost housing technologies.

“With the phenomenal increase in population and urbanisation, the shortage of housing is expected to increase from 24.7 million dwelling units in 2007 to 26.5 million dwelling units by 2011,” it said.