Affordable Housing in India: A Beneficiary Perspective

AuthorApoorva Bhate,Mercy Samuel
Published date01 March 2023
Date01 March 2023
Subject MatterArticles
Affordable Housing
in India: A Beneficiary
Apoorva Bhate1 and Mercy Samuel1
Affordable housing is the need of the hour to overcome the existing housing cri-
sis in India. About 95% housing shortage is observed in the economically weaker
sections of the society. Housing for All scheme—Pradhan Mantri Awas Yojana,
ushered in ample opportunities by establishing a lucrative model for all stake-
holders. But only 38% of the sanctioned houses are constructed in the span of
5 years. Success of the scheme lies in appropriate identification of beneficiar-
ies and creating a system with linkages for them to avail the benefits stated
under the scheme. However, constructed units are lying vacant and an upsurge
of 25% in unsold stock inventory is observed. Moreover, the focus of research
has always been on supply side to aid the builders and financers in service deliv-
ery. This prompts a need to scrutinise the situation and identify the prevail-
ing gaps. Interactions with stakeholders show the impediments in accessing the
government affordable housing. The study has generated relevant insights from
the users’ point of view regarding the various policy aspects which are yielding
deviations from the outcomes as previously desired by the policy. The study is
case-based orienting around affordable housing schemes in the city of Vadodara
in Gujarat.
Affordable housing, scheme beneciaries, PMAY, ARHCs, social impact institutes
Urbanisation is a global trend today. About 55% of the world’s population today
is living in cities with an estimation to rise to 70% by the mid-twenty-first century.
As per the United Nations’ urbanisation data, 90% of this transition will happen
Indian Journal of Public
69(1) 188–203, 2023
© 2022 IIPA
Reprints and permissions:
DOI: 10.1177/00195561221109065
1 CEPT University, Navrangpura, Ahmedabad, Gujarat, India.
Corresponding author:
Apoorva Bhate, CEPT University, Kasturbhai Lalbhai Campus, University Rd, Navrangpura,
Ahmedabad, Gujarat 380009, India.
Bhate and Samuel 189
in Asia and Africa. Consequently, house prices are on the rise, and developing
nations are struggling to achieve the median affordability standards (Nadar, 2019).
In India, more than 40% of the population will live in urban areas by the year
2030 as against the current figure of 34% (JLL, 2019). The Reserve Bank of
India’s (RBI) Annual Report suggested that India’s urban population will con-
tribute nearly 75% to the GDP (Sethi, 2017). With rising migration, economic
growth, rise in disposable income emerges a need for a good lifestyle which
reflects in the demand for housing facilities. Studies show that India might have
to spend nearly 8% of its GDP on civic infrastructure, to make the cities liveable
(Economic Survey, 2019).
As per the statistics, house price to income ratio in Indian metro cities is declin-
ing below the median of 4.5. At this point, the concept of affordable housing
comes into the picture. It helps elevate the standard of living of the weaker sec-
tions of society (Deloitte, 2016). In India, affordable housing is provided for lower
income group (LIG), middle income group (MIG) and economically weaker sec-
tions (EWS), who have considerably low levels of income in urban areas (India
Brand Equity Foundation [IBEF], 2012). They are decided on the basis of three
parameters—affordability threshold, standard unit size and house price to annual
income ratio as mentioned in Table 1 (Sankhe et al., 2010).
At present, a centrally sponsored scheme of Pradhan Mantri Awas Yojana-
Urban (PMAY-U) is being implemented to provide subsidised housing (MHUPA,
Currently, 42 lakh houses are constructed against the 110 lakhs sanctioned but
the demand generated is of 112 lakh houses. Affordable housing in India has taken
pace with time adhering to identified limitations. Developers and financiers face
challenges such as the non-availability of low-cost lands, high construction costs
and poor rental yields. It is observed there lies a wide gap between supply and
demand in this sector as shown in Figure 1 (Upadhyay, 2019). Reports show that
50% of the unsold housing stock of financial year (FY) 2018–2019 belongs to the
affordable sector (IDFC, 2018).
Gujarat is the fastest-growing state in India with 40% population living in
urban areas as per the 2011 Census. Affordable housing and affordable rental
complexes are new buzzwords in the real estate market of Gujarat. It is esti-
mated that there are 6.5 lakh slums in the cities of Gujarat and 99 lakh houses are
required for their accommodation. The state has recorded the highest completion
of affordable projects of 60% under PMAY-U (Urban Development and Urban
Table 1. House Price to Annual Income Ratio: Affordable Housing Categories in India.
Annual Income
Unit Size
(sq. m)
(in lakhs) EMI or Rent
EWS <3 30 <10 Not exceeding 30–40% gross
monthly income of the buyer
LIG 3–6 Up to 60 10–20
MIG I 6–12 Up to 160 20–30
MIG II 12–18 Up to 200 30–40
Source: HFAPOV document.

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