Active Stocks
Tue Mar 19 2024 13:51:07
  1. Tata Consultancy Services share price
  2. 4,005.40 -3.36%
  1. Tata Steel share price
  2. 150.15 0.37%
  1. Bharti Airtel share price
  2. 1,232.30 0.59%
  1. Power Grid Corporation Of India share price
  2. 260.85 -1.57%
  1. ITC share price
  2. 410.05 -1.76%
Business News/ Politics / Policy/  Govt seeks $3-4 trillion to meet ‘housing for all by 2022’ target: report
BackBack

Govt seeks $3-4 trillion to meet ‘housing for all by 2022’ target: report

A report by KPMG Advisory and Naredco says an overhaul of current funding mechanism might be required to meet the target

The total investment needed for housing development is about $2.3 trillion, with $1 trillion required between 2011 and 2030 to upgrade and develop suitable urban infrastructure and $500 billion for commercial real estate development, says report. Photo: MintPremium
The total investment needed for housing development is about $2.3 trillion, with $1 trillion required between 2011 and 2030 to upgrade and develop suitable urban infrastructure and $500 billion for commercial real estate development, says report. Photo: Mint

Bangalore: An investment of around $3-4 trillion is needed to achieve the government’s vision of housing for all by 2022. To meet this target, an overhaul of the current funding mechanism will likely be required, according to a report by consulting firm KPMG Advisory Services Pvt. Ltd and the National Real Estate Development Council (Naredco) released on Wednesday.

The housing shortage in India is estimated at 19 million units. Of this, about 95.6% is estimated to be from economically weaker sections (EWS) and low-income group (LIG) households, who cannot afford houses costing above 15 lakh.

While the total investment required for housing development is about $2.3 trillion, occupying the nearly 900,000 urban houses that are lying vacant could reduce this shortfall.

It is estimated that investment of $1 trillion is required between 2011 and 2030 to upgrade and develop suitable urban infrastructure and $500 billion in commercial real estate development.

Thus, the government should target a total investment of about $3-4 trillion by the year 2022 to achieve its vision of ‘housing for all by 2022.’

During a tight liquidity situation in the country, wherein the large equity inflow witnessed between 2006 and 2008 has completely dried up, investments by households have peaked and the government support continues to remain weak, strong measures are urgently required to drive households’ savings, opening up institutional lending and attracting equity capital, along with major structural reforms to drive the real estate sector and economic growth.

“Close to $1 trillion was invested in the real estate sector between FY08 and FY14. Of this, about 72% was met from household savings," the report says.

Funding from private equity (PE) and capital markets, which contributed up to 10% in FY08, has accounted only for 3-4% in the last few years. Banks and housing finance companies have demonstrated strong growth,but it has lagged the overall credit growth, the report said.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 20 Aug 2014, 01:36 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App