One significant pointer to India’s remarkable development and growth is its rapid urbanisation. Today one-third of India’s population lives in urban areas and by 2030, our urban population is expected to touch the 590 million mark. According to a McKinsey Global Institute (MGI) Report, it took India nearly 40 years between 1971-2008 for the urban population to rise by nearly 230 million. But it will take only half now the time to add the next 250 million. NRI Achievers brings you a report…
The MGI Report states that cities could generate 70 percent of net new jobs created to 2030, produce around 70 percent of India’s GDP, and drive a near four-fold increase in per capita income across the nation. And if urban growth is handled well, it can add 1 – 1.5 percent to the country’s annual GDP growth, thereby bringing the economy to near double-digit growth. However, the scale and challenge of urbanisation is immense, especially with regard to inclusive development. We can sustain economic growth by building inclusive cities which are planned centres of economic growth. Moreover, in our burgeoning cities, we have failed to provide the basic necessity of shelter to masses. Over the last many years, lot of work has been done on the housing front, especially through schemes like Jawaharlal Nehru National Urban Renewal Mission, and Indira Awaas Yojana, targeted at the economically weaker sections of society. But despite all our efforts, India today faces a huge shortage of 19 million dwelling units, which is projected to touch the 30 million mark by 2022, the year that marks the Platinum Jubilee of India’s independence. It becomes all the more worrysome, considering that most of this shortage is in the economically weaker section of our population.
In order to meet this massive urban demand, our economy will have to build 700– 900 million square metres of residential and commercial space in a year. In trans portation, we will need to build 350 – 400 kilometres of metros and subways every year, besides 19,000 – 25,000 kilometres of road lanes. And it’s estimated that India needs to invest US$ 1.2 trillion into capital expenditure on its cities over the next 20 years. This is indeed a gigantic task and government alone can hardly fulfill it. It is here that the private sector has to come forward and play a significant role. The need of the hour is a sound Public-Private Partnership policy aimed at achieving the desired goal of ‘Housing for All by 2022.’ We also need better planning and smart governance so that we can provide efficient healthcare, education, power, water, sanitation, transport facilities to improve the living standard of people especially as about 18 percent of our population lives in slums or in poor conditions. In this backdrop, the real estate, construction and housing sector has a huge responsibility to build India with speedy and sustained development. As we all know, this sector is a huge contributor to GDP that amounted to 6.3 percent in 2013. And with its linkages to about 250 allied sectors, real estate is a huge employment generator as well. It is heartening to note that the central government has fully realised the potential of real estate in building India’s economy. In the recent budget, the government has taken positive steps like liberalising FDI norms for construction besides allocating funds for credit flow to EWS & LIG housing segments. To ensure that houses are affordable and within the reach of the masses, there is a need for inclusive housing finance aimed at bringing the poor under the purview of home loans.
Also, we need to encourage and adopt newer technologies and building materials for this purpose. The government has to remove several hurdles like fund crunch, land acquisition problem, slow project clearances and promote skill development, transparency and accountability so that the sector can realise its full potential.