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 | Loose control Boost cheap housing sans intervention Our Correspondent The Government has finally realised that life in the urban areas needs to be streamlined and improved upon. Much of urban living is substandard; often it is subhuman. It is not just the smaller towns in Bimaru states which have been rendered wastelands by the socialist policies and rampant corruption; even our metropolitan cities are bursting at the seams. Mumbai, for instance, comes to a grinding halt every year during the monsoon season. It was way back in the 1980s that Calcutta was termed as a dying city. The politicos in Karnataka have not done anything substantial for its capital other than changing its name from Bangalore to Bengaluru. 'Unauthorized' colonies abound, and these lack proper planning and basic amenities. In this context, the Union Housing Ministry's move to give a stimulus to affordable dwellings is indeed a welcome measure. The Union Finance Ministry has already impressed upon nationalized banks to give cheaper loans to the people seeking small home loans. Now, the Housing Ministry has also recommended to the Prime Minister's Office that the interest rate be capped at 8 per cent for home loans up to Rs 7.5 lakh taken for houses of 400-1,000 sq ft. The National Housing Bank and HUDCO may also receive directions from the Government for a refinance window for the maintenance of lower rates for housing loans. All this is good, but the Housing Ministry also wants a cap on the prices of cheap house. If translated into policy, this will be a retrograde measure. For this will be amount to price control; and, as we have mentioned earlier on this page, price controls inevitably lead to bureaucratic interventions and corruption. Instead of indulging in excessive regulation and micromanagement, the Government should provide an enabling environment so that realty firms find it lucrative to build affordable houses. At present, the emphasis is on super-exclusive apartments (beginning with Rs 1 crore) and slightly cheaper flats. For a householder who cannot shell out more than Rs 10-12 lakh, there are dwellings in areas where titles are often not clear and which are often not 'authorized' by the local bodies. Unsurprisingly, these localities are eyesores in urban areas. With a proper policy framework, private sector participation can be used to galvanize affordable housing. This will be a boon to the millions of people who yearn for a shelter that they can call their own; this will also be a fillip to the sectors which are closely allied with construction. Another serendipitous consequence would be a boost to employment as realty is a labor-intensive sector. So, the Government should speed up its own efforts to boost cheap housing, but it should also avoid controls. Posted on : 1/6/2009 Mail this article to your friend |