Real Estate Housing and the Five Year Plans

Recent 5 year plans: Brief Overview
In the first segment, we take a look at the transition of policies and their implications towards the real estate market. The snapshot of the 7th, 8th and 9th plan are taken, while the 10th 5 year plan is taken in more detail.
While the urbanization is a natural consequence of economic changes that take place as a country develops it also helps to contribute to the growth process at large. The positive role of urbanization is often shadowed by the evident deterioration in the physical environment and quality of life in the urban areas caused by widening gap between demand and supply of essential services and infrastructure. Hence, in all of the plans, the outlook turned toward rural amelioration.
7th plan:
The increase in population between 1985 and 1990 would generate roughly an additional requirement of housing units of 12.4 million in rural areas and 3.8 million in urban areas. Even if the aim is only to prevent an increase in the magnitude of backlog in housing shortage, it was necessary to build during the seventh plan period around 16.2 million dwelling units.
The seventh plan asserted that planning of urban development to be supportive of the economic development in the country. it urged making use of industrial location policy to subserve regional and urban planning and suggested that an effort be made to channelise private industrial investment in the vicinity of small and medium towns to check population migration. Public sector had to concentrate on the provisions of houses to the poorer sections of the society. HUDCO, with the state governments, would continue to play an important role in the provision of housing sites in rural areas. There was urgent need to adopt low-cost housing techniques, particularly for mass housing schemes for low income groups. Use of alternative building materials was widely adopted.
Promotion and encouraging of self-help housing .
Provision of house sites to the balance of rural families.
Reducing cost of housing units in line with the paying capacity of the targeted groups.
Securing reduction in construction costs.
Harnessing science and technology efforts.
8th plan:
Macro strategy for urban development with explicit recognition of rural urban linkages had been evolved. The benefits of accelerated pace of agricultural development was taken through appropriate utilization of backward and forward linkages. Appropriate location policy for development of industry and other major employment generating non-agricultural activities provided an effective avenue for absorption of surplus rural labour force.
Consolidation of planning process.
Convergence of all related programmes.
Taking measures-legal, financial and organizational – for enhanced and equitable supply of urban land.
Private and public sectors acting in tandem for urban infrastructure and housing.
Environment friendly policy.
Employment generation outlook.
9th plan:
The ninth plan focused special attention on households at the lower end of the housing market, the priority groups identified for such support. Government will, as a facilitator, create an environment in which access to all the requisite inputs will be in time, in adequate quantum quality and standards. there was provision for more direct intervention by the government in the case of lower segments of the housing market and selected disadvantaged groups. A package of incentives and concessions to attract private sectors was introduced to shoulder the task of housing for the poor.
Development of urban areas as economically efficient, socially equitable and environmentally sustainable entities.
Accelerated development of housing for the low income groups.
Development and upgradation of urban infrastructure services.
Alleviation of urban poverty and unemployment.
Promoting accessibility and affordability of the poor to housing and basic services.
Promoting efficient and affordable mass urban transportation systems in metros.
Improvement of urban environment.
Promoting private sector and NGO participation in the provision of public infrastructure.
Democratic decentralization and strengthening of municipal governance.
Give the large number of activities impinging on housing directly and directly and the multiplicity of agencies involved, designing a framework for orderly and dynamic growth in the housing sector in the Tenth Plan is a challenge to the planners.
The working Group on Housing has estimated the urban housing shortage at the beginning of Tenth Plan at 8.89 million units. While this is indeed an alarming number, it includes the ‘congestion’ needs of joint families, obsolescence and replacement of old houses and upgrading of all the kutcha houses. The total number of houses required cumulatively during the Tenth Plan period is assessed at 22.44 million. These is, therefore, a good case for continuing the two million housing scheme during the tenth plan period, as it will take care of about 3.5 million houses for the urban poor.
The housing and habitat policy, 1998 has specifically advocated that Government create a facilitating environment for growth of housing activity instead of taking on the task of housing itself. Housing is largely a private sector activity in both the rural and urban sectors. This is not to rule out the need for a high degree of involvement of the Government and its agencies in meeting the housing needs of the urban poor. The nature of this involvement – it may in some instances extend to house construction itself – is to be determined by the needs of a given situation.
The National Agenda of Governance also emphasised that housing activity would be an engine for substantial generation of employment and all legal and administrative impediments that stand in the way of vigorous housing activity should be removed forthwith. What is undisputed is that governmental initiatives – and its ‘facilitating role’ – have significant impact on the provision of housing and growth of the sector. These initiatives and interventions relate to legislations concerning ownership, transfers and development of land; stamp duty and registration laws; rent control legislation; tax policy particularly relating to housing loans; property and land tax laws; town planning law and its actual implementation, i.e., comprehensive development plans, zoning regulations, land use change; and building bye laws. It also covers urban development activities through parastatals and urban development authorities; sites and services schemes; slum policy; provision of urban infrastructure, urban transport policy and facilities; the institutions in the public sector relating to housing development and housing finance; and house construction in the public sector.
The working group on housing for the tenth plan has observed that around 90% of housing shortage pertains to the weaker sections. There is a need to increase the supply of affordable housing to the economically weaker sections and the low income category through a proper programme of allocation of land, extension of funding assistance and provision of support services. The problem of the urban shelter-less and pavement dwellers has not been given the consideration that is necessary in a welfare or pro-poor state, as seen from the lack of progress in the Night Shelter Scheme.
In order to increase the proportion of household savings in the housing sector, as well as to provide houses to those who cannot as yet afford to have their own houses, there is need to encourage the promotion of rental housing by the private sector, public sector, public sector, cooperatives and individuals.
Balancing the liberal availability of land, with the demands of orderly growth with adequate provision of infrastructure is no easy task, and the land sharks are invariably one step ahead of the authorities that enforce regulations and provide of amenities. This has led to the proliferation of unauthorised layouts and informal settlements. Public and private initiatives in various parts of the country have already demonstrated that given the will and efficiency of implementation, it is possible to plan ahead and promote orderly growth. These efforts need to be made more widely known and replicated.
The repeal of the urban land (ceiling and regulation) Act, 1976 has been a significant step towards reform in the urban land market. Following the repeal of the central legislation, a number of the state governments have also repealed the state-level law.
However, the Act still exists in some states, while several other state laws like the land revenue act, land reforms act, stamp duty act and urban development authorities acts/town planning acts continue to hamper the availability of land for housing and other construction, pushing up land prices.
Thus a need is felt to take measures to ease the availability of land so that growth can take place through increased construction and housing activity and land prices can be brought down to moderate levels making affordable shelter available to the lower income groups.
More flexible zoning regulations to permit change of land use where justified, easier subdivision regulations and extension of trunk services to new areas/new townships will help to reduce congestion and develop the cities in an orderly fashion. Innovative measures for land assembly, land pooling and use of land as a resource to build up infrastructure will need to be continued and their administration made more efficient and transparent.
Investments have not materialized even though 100% FDI is permitted for development of integrated townships as the conditions relating to land procurement are complex.
The system of maintenance of land records and registration of property transactions are outmoded and need to be modernized through computerisation so as to speed up the process. There is need to develop and implement a system of authentication of property tiles on the lines of the Torrens system now in vogue in many countries.
Together with the rationalisation of stamp duty, these measures will help in the development of a genuine property market, thus helping in assessment of taxes. Rent control and tenancy laws also prevent the development of rental housing.
Strengthening of housing stock in vulnerable regions.
The working group on housing has suggested a scheme for strengthening of the vulnerable house in the EWS and LIG category in 107 districts which face highest risk of damage because they are multi-hazard prone. According to an estimate, these houses can be strengthened and retrofitted at 10 percent of the cost of construction of a new house on an average.
Come measures cited for implementation during the tenth plan period:
The first priority in urban housing, particularly for the urban LIG and EWS, is the provision of land at affordable prices.
Increased availability of developed land in urban areas through adoption of various innovative approaches like land bank for the poor and land assembly methods, vacant land tax and TDRs.
Unauthorised settlements have become a part of the urban scenario and should be brought under the property tax net.
The city planning provisions to be tuned to weaker sections through adoption of appropriate and affordable standards and norms, use of cluster housing and growing housing concepts.
Housing and economic activities have go to hand in hand. There is need for coordinating the development of industrial areas and housing areas.
Schemes such as the two million housing scheme and the new scheme of housing with central assistance for the slum population (Valmiki Ambedkar Awas Yojana or VAMBAY) should be used to provide immediate benefit to the most disadvantaged urban segments.
Availability & Solution to provide HUDCO assistance where states are unable unwilling to stand guarantee for these loans.
To harness the objectives of the 7th, 8th and 9th 5 year plans, the outlays approved of are shown in table 1 of appendix.
Table – 1 Approved outlays on urban development: Central Sector.
(Rs in lakhs)

Sl. Name of scheme 7th plan 1985- 8th plan 1990- 9th plan 1991-
No. 90 91 92
1 2 3 4 5
I.D.S.M.T. 8800 2500 1500
2. Equity support to HUDCO 3500 200 450
Contributing to NCR planning board. 3500 1000 1400
Research & Training in Urban &
Regional Planning 200 – 40
Development of displaced persons colonies 150 32 10
Urban basic services 500 2500 2300
Urban transport consortium fund – 200 500
Nehru Rozgar Yogana* – 12000 11300
Scheme for educated employment – – 200
Grants to urban local bodies through
Hudco/UD& UWS – – 200
Removal & Collection of cattle in
Calcutta 150 – –
Total 16800 18432 1790

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