Monday, 17 August 2015

Housing for all can increase India`s GDP

The Central Government`s housing for all scheme can help increase India`s GDP to the tune of almost Rs 15 lakh crore in the next 7 to 10 years, however it will all depend on how quickly and efficiently the existing infrastructure across cities are ramped up, whether the approval process are put on fast track and most important of all whether the scheme is reaching the actual beneficiary.

If all these happen then the direct benefit to the government could be Rs 15 lakh crore in seven to ten years time frame which could give a huge boost to the Indian economy, however this ambitious initiative is not without challenges, the primary challenges are, funding of this scheme through public-private partnerships and increase in supply of raw materials like steel and cement.

The existing basic infrastructure management of municipal services across cities in India, such as supply of drinking water, sewerage, basic sanitation and waste management are not fully equipped to handle a project of such size and magnitude at this point in time, so a lot of ramping up needs to take place to make this project successful.

The biggest economic effect will be felt in states where there is demand for housing, like Punjab, Uttar Pradesh, West Bengal, and tier II and tier III cities near major metros. With this initiative put in place there will be a lot of employment opportunities in the sector, across various levels in major companies and consultancy services which will further impact the economic growth of India.

Manufacturing sectors which are connected to the construction industry like steel, cement, iron and equipment manufacturing companies will see a healthy growth depending on where the construction industry is going, this in turn will create further job openings for both skilled/unskilled workers which in turn will enhance the economy further, the government led by Narendra Modi has a vision and dream, to provide more than 20 million houses in three phases in the time period between 2016 to  2022 , the government has also made provisions for a Central grant component of Rs 1 lakh per slum house going to the state government and Rs 1.5 lakh for other houses which could go directly to the households.


Another important initiative of the Central Government is that it will provide an interest subvention to households to the tune of 6.5%, if they are taking loans for a period of 15 years through two government agencies- Housing and Urban Development Corporation and National Housing Bank.

This is a vision that the Prime Minister has for the country where everybody has a house whether rich or poor and where everyone has a chance to lead a dignified life in a healthy and clean environment, if the government implements this scheme effectively, this vision of his could very well become a reality.

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