INTRODUCTION:

Housing or shelter is the basic need of human being. This is accepted by the civi
lized society. Housing is an enigma to the developing countries; it is simultaneously
the hardest problem to solve. Housing has commonly acquired a product dimension
which essentially professes the existing housing stock and ways and means by the
agencies to provide more housing. Man is always fascinated by the acquisition of a
house. But the greed to acquire a house for economic reason or to accrue wealth out
of a house has given a new dimension to housing.

1) concept of Housing:
The word ‘housing’ can be used as a noun or as a verb. When used as a noun, housing
describes a commodity or product. The verb to ‘house’ describes the process or
activity of housing. Whereas shelter is place or house whereas person lives.

The concept of housing connotes a dwelling place owned and controlled, constructed
by the occupants themselves or by any other but enjoyed for the time being. The main
ingredients of concept of housing are:
i. A residential house;
ii. Constructed by the occupants or by any other and
iii. Having minimum living facilities. Housing is not just a question of house. But, a
world of community and cosmos for building and nurturing. Thus, for maintaining
social, cultural, economic and political systems which permit human beings not just to
survive, but hopefully to proper.

In the hierarchy of basic human needs, shelter occupies third place only after food and
clothing. According to Maslow’s need hierarchy theory, after the satisfaction of one
want; another want will arise for human being. This implies that an individual after
satisfaction of food and clothing needs thinks of the house or good accommodation.

2) Importance of Housing:
Housing being one of the basic needs and an indicator of the quality of life that a
citizen enjoys, it also helps in creating conditions conducive to the achievement of
crucial goals in matters pertaining to education, health, sanitation and the living
standards of the people. In several developing nations including India, house is a work
place. As such better housing facilities would mean improved productivity.

Housing activity involving the productive investment, promotes economic activities

and thereby substantial employment opportunities. Adequate shelter implies more
than a roof over one’s head, which includes adequate privacy, adequate security,
space, adequate ventilation, lightening, adequate basic infrastructure and location with
regard to work and basic facilities at reasonable cost.

Shelter provision triggers additional investment and employment in building

materials, production, transport and marketing. According to International Institute for
Environment and Development (IIED), London, “habitat must mean social, economic
and political security must include safe, healthy and affordable shelter, a
neighborhood providing health care, child care, education, piped water, sanitation,
transport and access to adequate livelihood”.
India has also been experiencing a spectacular growth in its urban population and in
the number and size of its Cities. India’s urban population which was mere 26 million
at the beginning of the century had by the year 1991 reached the figure of 84, 63,
02,688. By the year 2001 A.D the population of India was 101,24,00,000 and by the
year 2011 the population of India reached to its peak of 121,00,00,000. It is expected
that the urban population will reach the figure of 141, 00,00,000 by the year 2021.

Housing creates self employment opportunities in countries with substantial under

utilized labor, material and financial resources. Housing can make use of such
resources at low cost. It is recognized as a profitable investment proposal, since the
net asset value increases year after year.

Lavish, luxurious homes are planned by a few people for they have excessive funds
which they otherwise cannot utilize. For instance, the accumulated tax evaded income
(i.e black money) goes into the investment in the house construction, whatever maybe
the source of funds. Many feel pride, peace, contentment and physical as well as
economic security by possessing the house. The significance of housing from
commercial point of view is one of the important sources of earning for those who
have got utilizable excessive funds. By constructing house for rental purpose, people
earn constant incomes for generations together. People may go for housing together
by transferring unproductive savings in the form of gold and other property. The low
income yield on the investment is largely compensated by the rise in the net value of
the properties.

HOUSING IN INDIA

Housing apart from serving the basic aim of providing shelter, plays an important role in
achieving some of the sociology-economic objectives of the nation. The National Planning
Commission observed that “in fulfilling the basic needs of the population, housing ranks next
only to food and clothing importance”. Minimum standard of housing is essential for healthy
and civilized existence.
The National importance of housing could be analyzed in terms of:-
1. Contribution to GDP.
2. 2. Capital Formation.
3. 3. Generation of Employment.

1) Contribution to GDP: Housing increases the quantum of national income also. The GDP
contribution of housing at factor cost increased from Rs.1357 cores in 1970-71 to Rs.3, 562 in
1980-81 at current prices.

2) Capital Formation: House property is a fixed capital which means an investment in the
long term assets of the Nation. As such increase in housing facilities means an increase in
capital formation. Share of housing in capital formation increased from Rs.962 crore at
current prices in 1970-71 to Rs.2509 crores in 1977-78 and to Rs.3034 crores in 1978-79. It
accounted for 13.4%, 14.4% and 12.8% of gross domestic capital formation in these years.
The share of household property in the total wealth of household is comparatively higher for
lower income group and it is considered as lower for higher income group.
3) Generation of Employment: Housing industry is labor intensive. An investment of Rs.1
crore in housing was estimated to generate 923 man years of direct employment. In
developing countries, UN-employment is a chronic problem. Housing is one of the important
industries which creates an employment opportunities on a larger scale. The number of
workers in the building construction increased from 1.26 million in 1970-71 to 2.00 millions
in 1980-816 . Policies treat housing as welfare drain to limited public resources. But, by
adopting market-oriented strategies, developing countries can transform a sector that dampens
economic growth. The World Bank recognizes that policies to promote free markets lead to
healthy housing sector, which in turn help to drive economic growth7 . The role of housing in
poverty eradication programme is potentially significant because of the range of benefits and
such investment can support number of benefits.

PROBLEMS OF HOUSING IN INDIA

Housing activity generates local employment and local income. Since house
construction is highly decentralized production activity, it has the advantage of
creating dispersal of employment. In Country like India with regional disparities in
income and employment, it is quite desirable that investments in both public and
private are channeled to housing. House construction activity can take place at any
time except during monsoon season. Hence, it is possible through careful planning to
provide alternate employment to agricultural laborers during off- season. Despite all
these benefits accrue to housing sector, it is not free from problems and they are as
under. The problem of housing in under-developed Countries is more severe than in
developed Countries, which are under:
i. The rate of growth of population is fast and high.
ii. Large part of population is below the poverty-line.
iii. The quality of building material is inferior.

ROLE OF GOVERNMENT IN HOUSING

For majority of household, housing has been primarily a self help activity. It has made
it necessary of the state government to launch housing schemes for weaker sections of
the population. In India, the formulation and implementation of the housing
programme is the responsibility of the State Governments. The Central Government
however, supplements to the effects of the State Governments. Housing Schemes by
Government of India: The following are some of the housing schemes formed by
government for development of housing in India.

1) Integrated Subsidized Housing Scheme: This scheme was introduced in 1952 for
the low paid industrial workers and other Economically Weaker Sections (EWS) of
the community. Under EWS Housing Scheme, financial assistance of Rs.5,000/- will
be given for the eligible persons whose monthly income will not exceed Rs.700.

2) Low Income Housing Scheme (LIG): This scheme was started in 1954 to assist
whose income ranges between Rs.701 to Rs.1,500 per month. This scheme covered
those houses, whose cost of construction was not exceeding Rs.30, 000/-. The loan
assistance granted by the government was Rs.23,500 which represent 80% of cost of
construction.
3) Middle Income Housing Scheme (MIG): The MIG housing scheme launched in
1959, is financed by LIC as loans were given to the eligible persons whose monthly
income ranges between Rs.1500/- to 2500/- . Loan assistance was restricted to 80 %
of the cost of construction subject to a maximum of Rs.40, 000/-. Loans were also
granted for purchase of readily built houses18 .

HOUSING FINANCE IN INDIA

The responsibility of providing housing finance largely rested with the Government of
India till the mid-eighties. The setting up of the National Housing Bank (NHB), a
fully owned subsidiary of the Reserve Bank of India (RBI) in1988 as the apex
institution marked the beginning of the emergence of housing finance as a fund based
financial service in the country. It has grown in volume and depth with the entry of a
number of specialized financial institutions/ companies.

1. Housing Finance System: The implementation of housing finance policies pre-

supposes efficient institutional arrangements. Although there were a large number of
agencies providing direct finance system to individuals for house construction, there
was no well established finance system till the mid 80s in as much as it had not been
integrated with the main financial system of the country. The setting up of the
National Housing Bank (NHB) a fully owned subsidiary of the Reserve Bank of India
(RBI) and as an apex institution was the culmination of the fulfillment of a long
overdue need of the housing finance industry in India. The system has also been
characterized by the emergence of several specialized financial institutions which
have considerably strengthened the organization of the housing finance system in the
country. At present there are about 320 housing finance companies of which only 37
are registered with the NHB which accounts for 98% of the total housing loan
disbursed.

2. Central and State Governments: Till mid eighties, the responsibility to provide
housing finance rested by and large with the govt. The Central and State government
supports the housing building effort indirectly. The Central govt. has introduced, from
time to time, various social housing schemes. The Central govt. had set up the
Housing and Urban Development Corporation (HUDCO). The Central government
supports the equity support to HUDCO and guarantees the bonds issued by it. Both
Central and State government provides house building advances to their employees.
While the Central government formulates the housing schemes, the State governments
are the actual implementation agencies.

3. Housing and Urban Development Corporation (HUDCO): Incorporated on 25th

April, 1970. HUDCO was an expression of the concern of the Central government
with regard to the deteriorating housing conditions in the country and a desire to assist
various agencies in dealing with it in a positive manner. The principle mandate of
HUDCO was to ameliorate the housing conditions of all groups with a thrust to the
needs of the Low Income Group (LlG) and Economically

Weaker Sections (EWS). HUDCO today has emerged as the leading national techno-
financing institution with the major objective of financing/encouraging the housing
activity in the country and alleviating housing shortage of all groups in rural and
urban areas and also the development of urban infrastructure of various shades in
human settlements.