Economy & Market
Demand for affordable housing will improve cement business
Manju Yagnik, Vice Chairperson of Nahar Group,
is of the opinion that the 'Housing for All' objective requires huge investment in infrastructure, a large-scale skill development programme, and a tremendous financial support for timely implementation.
How successful is the 'Housing for all by 2022' programme? What are the opportunities specifically to your group?
In the past one year, looking at the massive demand, developers have modified their projects into affordable housing segment. And now with the implementation of RERA, the real estate industry is moving into a right direction. Here, land acquisition is the main and a challenging component. To simplify its process, bodies like NAREDCO and MCHI along with Government are working towards it. To further support affordable housing, the Finance Minister recently announced 'Infrastructure' status to it, which is likely to result in increased participation from private players. This step is expected to act as a catalyst to meet the objectives of 'Housing for All' by 2022. The government has now made it easier to buy land by providing offers to avail their own land at cheaper rates for affordable housing.
How it is likely to benefit cement sector? Do you think cement consumption will increase because of this?
The demand for cement is steadily on the rise owing to rapid urbanisation and construction activities. Government's infrastructure development, Smart Cities Mission and 'Housing for All' initiative will further accelerate the growth of the cement industry. Rising demand for affordable housing will set the demand for cement soaring.
What kind of incentives are provided by the government so that more and more developers participate in the segment of affordable housing?
The government's commitment to support mass and affordable housing has created massive opportunities for the real estate sector. We are already witnessing government agencies and private developers undertaking such projects. A sustained focus on these segments would provide the right platform for the industry in meeting the likely demand of 80 to 90 million houses in the next 10 years that caters mainly to the middle- and low-income groups. An encouraging sign is that some of the big names in the industry who are known for developing premium and luxury housing have entered these areas. Equally significant is the government's scheme of Affordable Housing, a part of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), which aims to promote public-private partnerships (PPPs) amongst the private, cooperative, financial services sectors and urban local bodies for realising the goal of affordable housing for all.
Which are the states that are progressing well and providing enough opportunities for the affordable housing sector? How important is the government decision for PPPs in this space?
The 'Housing for All' objective requires huge investment in infrastructure, a large-scale skill development programme, and tremendous financial support for timely implementation. Innovative and aggressive steps are required without which, the goal cannot be accomplished. Also, the cost of construction is high, making it financially unfavourable for some developers.
In order to encourage the participation of private players to enter affordable housing through financial or non-financial support, the government has taken a great initiative by developing the PPP model. With PPP policy for affordable housing in India, we will see a reduction in land burden, financial and capital investment, maintenance and positive outcome of the capital invested. As land is the costliest commodity in real estate, models in affordable housing such as private land can be developed for intensive utilisation, higher FSI or in exchange for permission to build high-end housing. The PPP model has a potential to boost affordable housing if implemented in the right direction. We will witness fast approvals and transparency in the system.
Affordable housing requires fast pace work completion. In this situation, do we see inclusion of new technologies? What are these?
As the demand is increasing day-by-day for affordable housing, there has to be equal supply for the demand. Precast construction is cost-efficient, fast and sustainable building technology for large housing projects that doesn't compromise on quality. Precast is a standard building system based on ready-made, factory-manufactured elements and intelligent connections. It provides how to style and construct an ample range of appropriate homes to fulfill the requirements of city dwellers in an exceedingly affordable timeframe and at an affordable price. Such new technologies will help boost the supply faster for affordable housing at a reasonable price.
How do think has been the response of private sector to the scheme? What further changes you desire to have?
Affordable housing is the need of the hour. If we look at the current scenario, there is a huge demand for affordable houses in Mumbai. India, like most major emerging economies, has been witnessing accelerating population shift from rural to urban areas. In fact, as per census 2011, for the first time since India's independence, the absolute increase in population was more in urban areas than in rural areas. This shift is creating a larger requirement for housing and its mounting pressure on the existing infrastructure. If we do not address this, it will further aggravate the explosion of unplanned and unsustainable city.
What's your view on the present approval process of housing projects? Does affordable housing get a separate attention? What are the factors driving affordable housing in India?
In the current scenario, affordable housing is the one big thing in real estate sector. With government's support to private developers, participation is increasing day by day to boost affordable housing. There will be immense support as there has to be six million affordable homes by 2022 in order to achieve the mission.
- RAHUL KAMAT