The Hindu Business Line : More to housing than meets the eye

It so happens that housing and its infrastructure are a good business to squeeze. As a result, our political establishment has a vested interest in making land prices — and hence housing prices too — as high as possible and let the poor have minimal sops, says P. V. INDIRESAN.

Housing is a critical component of national infrastructure and any mismanagement is fraught with grave consequences.

A few years ago, returning from a New Year Party, I could not pass through the fashionable shopping complex that is close to our flat — the crowds were so heavy. This year, we did not go to any party but strolled into the same bazaar. The security was quite tight. Dozens of young men were making plans but there were no crowds. The crowd was 80-90 per cent male, though there were few young women around.

The next day, on January 1 evening, there was no security. The bazaar was even more crowded but not like it used to be. The terrorist attack in Mumbai has evidently had an effect.

Like all bazaars, this one — an up-market mall — was very dirty. There are always a dozen rag-pickers roaming around, picking up what they value and throwing away the rest. On a day or two in a week, the bazaar is swept and then it is still not great but quite acceptable. I wonder why our market complex — I am told it has over a hundred eateries plus a larger number of up-market shops and business houses — cannot employ half-a-dozen sweepers to keep it clean.

The market has also a score of beggars/rag pickers. Mainly they are boys; the girls are either few or are exhibited mainly when they are infants and when they are old, at any rate are mothers. I do not know where they stay. Delhi is very cold in winter and I doubt whether they have any shelter. Rumour has it that they spend their earnings mainly on drugs. I do not know, but the children are very agile, jolly and fairly well-fed. There is next to no sign of starvation among them.

Adopt Indonesian model

If I were to make one New Year resolution, I would choose that we house every one and not merely the well-to-do. When it comes to poverty our government operates with blinkers. It treats one as poor when they do not get two meals a day and claims that there are very few of them.

By the World Bank criterion of $1.25 per day, most of our population is very poor. However, according to the government, our villages are short of 14 million dwellings only. That is absurd.

The quality of housing determines the style of living; it is the biggest investment that most households make. As the recent meltdown in the US and elsewhere has shown, housing is a critical component of national infrastructure and any mismanagement is fraught with very grave consequences.

In India, we have been particularly forgetful of housing as an essential and critical feature of socio/economical life of the country. That is why it is important to consider how to house our population. With a population of a little over a billion and a family size slightly in excess of five, the country needs at present around 200 million dwellings.

In another 50 years, when the country’s population would possibly stabilise around 1,800 million and a family size of four, the country will need about 450 million dwellings. That is a tall order — to add nearly ten million dwellings every year, virtually forever.

As of now, the country is building large numbers of high-rise luxury apartments and many more slum quarters. The former costs about Rs 35 lakh or even more for a 100 sq.m dwelling — theoretically they are affordable only by those who have incomes of around Rs 1,00,000 a month. Those houses are also built as gated communities and exclude poorer people who serve them. The poor have no option but live in nearby slums.

The latest report of the Ashok Jha Committee is more promising. It has recommended that we adopt the Indonesian model where, compulsorily, three middle-class houses and six simple houses are built for every HIG dwelling — with the commercial housing of the HIG cross-subsidising the social housing of the middle and the lower classes. Whether our political system will adopt such a model we cannot say. The best is to hope it will do so.

By modern standards, India is grossly under-urbanised. That is one of the reasons why our planners short-change the villages. That is why our cities are growing without check, one should say cancerously, to become mega cities.

Traditional developed states of Europe and the US do not have the kind of mega cities that we have and other developing countries too have. It is important that we appreciate that it is possible to have urbanisation without building mega cities.

Housing policy shortcomings

Cities are growing and our villages are languishing because villages are denuded of capital. The problem of rural development in India is one of capital — rather the lack of it. Bank credit to villages is, per capita, 25-30 less than what it is in urban areas. That is the main reason why our villages are socially and economically as poor as they are.

In brief, the problems in India’s housing policy are:

Preponderance of highly expensive high-rise apartments in cities and very close to cities and built as gated communities.

Concentration of investment in cities and gross neglect of villages in our planning.

Forcing most people, including the lower middle classes, into slums in cities.

The question is: How do we rectify these problems and build new housing estates that are truly worthy and economical enough to house both the rich and the poor? That Indian housing quality is poor has been known for ages and nothing has been done or is being done about it. That cannot be due to an accident but due to deliberate policy.

As already mentioned, one of them is the planners’ urban bias which allocates higher investment in urban areas. The second reason, which few people care to talk about, is the need for politicians to collect money for their legitimate (and illegitimate) activities. The urban bias can be changed by a determined chief minister but the latter requires changes in our electoral laws.

Our electorates are large, huge in fact; each one of our parliamentary constituencies is larger than many states in the United Nations. Contacting voters on such a large scale is expensive but the funds permitted to be used are miniscule. That forces our politicians to collect money under the table.

For instance, according to Bharat Nirman — the government’s prestigious scheme for rural development — rural houses will get Rs 25,000 only. Compare that with the lakhs it costs to build houses in cities.

Hence, it will be difficult to have a rational housing policy until election expenses are made rational and, in fact, met by the state to such an extent that any normal person can afford to contest elections using legal funds only. That is why housing has many more ramifications than what is apparent at first sight.

(To be continued)

(The author is a former Director, IIT Madras. Response may be sent to indiresan@gmail.com)

This is 242nd in the Vision 2020 series. The last article appeared on December 22.

More Stories on : Infrastructure | Real Estate & Construction | Vision 2020

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