| |August 201819funds, allowed such funds to invest in the realty sector. The following year actually witnessed the adop-tion of the Real Estate (Regulation & Development) Act, more com-monly known as RERA, which was originally mooted by the UPA gov-ernment in 2013 and also allowing concessions on the service tax ap-plicability on `under construction' residential units. In 2017 the gov-ernment announced infrastruc-ture status for affordable housing, paving the way for attracting far larger investments for the industry. It also introduced the much ­need-ed PPP (Public-Private Partnership) for affordable housing projects. On the policy side, the scope for the Credit Linked Subsidy Scheme (CLSS) was expanded and a dedicat-ed Affordable Housing Fund (AHF) in National Housing Bank, funded from priority sector lending short-fall and fully serviced bonds autho-rised by the Government of India was also introduced. While research estimates indi-cate that the "affordable housing" industry will be a INR 6 trillion market by 2022 (Source: Indian Real Estate Sector, Grant Thornton & Secondary Research), RERA is, pos-sibly, one of the most potent instru-ment of change which is expected to usher in control and supervision in this huge market. While, as on 31st July '17 a large number of the states were yet to implement the act in their respective states, there were relaxations given in some of the states which tended to dilute the efficacy of the act, at least in the near term. For example, in a couple of states, the on-going, unfinished projects have been kept outside the purview of the Act, while the reg-ulatory authority who is supposed to be enforcing the act has not been constituted in some of the others. Another shortcoming has been that projects of less than 1000 square metres have also not been cov-ered by the Act, which tends to keep away the benefits of this regulation away from small projects. Like in most eco-nomic welfare schemes, the de-mand for affordable housing for the Middle-Income Groups and the High-Income Groups (MIG & HIG respectively) would be hugely concentrated from the top 8 eight cities, i.e. Mumbai, National Capi-tal Region (NCR), Bangalore, Kol-kata, Hyderabad, Chennai, Pune and Ahmedabad (estimated to be around 2.7 million housing units, according to the India Brand Equi-ty Foundation). As of now, accord-ing to JLL (Jonas Lang LaSalle) the highest number of unsold residen-tial housing inventory is present in the NCR, Mumbai and Bangalore. Unfortunately, the total demand for LIG (Low-Income Group) hous-ing, estimated to be close to half of the demand across segments has seen only 2 percent share of the total new inventory added in recent times. Actually, Maharash-tra has been leading the way in the launch of affordable housing with more than 1-lac units having been launched across the state, with in-vestments in excess of INR 15-thou-sand crore. Gujarat has, to its credit, launched more than 28-thousand units at an investment of close to INR 10-thousand crore. On the PPP issue, while it is no doubt intended to be a steroid dose for bringing about a much more improved off take of projects; the outlook remains hazy even now. The willingness of large developers to work on projects, where the prof-it margins would be wafer-thin, seems to be doubtful. But, overall, they are possibly a better bet as partners to the government since they, with their well-leveraged range of products, could af-ford to work on mar-ginal returns for this segment.While, on the other hand, the smaller developers, with hardly any margin of profit to cushion them, are most certain-ly going to be non-starters for this initiative. The danger remains of international developers, with deep pockets, making an aggres-sive entry into this segment and, ultimately, killing off the smaller players. It, indeed, remains a prob-lem that is not going to disappear in a hurry. However, major strides have been made on the availability of fi-nancing for the prospective home-owners. While the traditional channels for funding by commer-cial banks and the housing finance companies (HFCs) continue full swing, the number of such HFCs has increased substantially in the last 4 years. The National Housing Bank has, taking an aggressive developmental role, have been in-strumental in ensuring that 34 new HFCs have come into existence compared to the 58 that existed at the end of financial year 2014. This, indeed, is a huge develop-ment, boosting the credit delivery mechanism substantially. Therefore, while we are witness-ing a historic race against time by the government in ensuring hous-ing for all before the end of the next five years, many of the pieces of this gigantic jigsaw puzzle are yet to be located, much less fitted in. However, we still remain optimis-tic because even partial fulfilment of this massive target would be a tremendous achievement. Sujan Sinha
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