1.1         With 285 million people living in the cities, India has the second highest urban population in the world, although in percentage terms, urbanisation presently stands at a relatively low 28 percent (Census 2001). By 2030, urbanisation level is expected to cross 40 percent. That means, another 325 million people, will be added to the Indian towns and cities (UN 2007). With rapid urbanisation, delivery of affordable housing with basic minimum infrastructure to the urban poor has emerged as the major challenge confronting the Indian cities.

1.2         The liberalisation of economy started in 1991. Since then, consistently high economic growth rate had led to rising income. But the real estate sector is growing at triple the rate and affordable housing in major cities is slipping out of reach of even the middle class.[1] In 2004, a year often termed as the best year in decades for potential home buyers, the house price as a multiple of annual household income was 4.4, and since then had shot up to 5.1 in 2007 (Sinha 2007), leading to urban sprawl as the middle and lower income groups are either pushed further away to peripheral areas or to informal housing solutions.

 

Source: National Buildings Organisation (2002)

 

1.4         As per the Census Survey of 2001, India had total residential housing stock of 187 million with only 51 percent being permanent construction. Out of this, 54 percent have no sanitation, nearly 85 percent do not have electricity and more than 22 percent do not have drainage facility.

 

2.5         Piecemeal and unfocussed attempts had led to escalation of affordability problem for the poor - who take shelter in unauthorised colonies and squatter settlements.

2.7         At the lowest rung are the squatter settlements – which do not hold legal tenure over the land. The squatters in big cities like Mumbai, Calcutta or Delhi are found in areas most unsuitable for human habitation - along railway tracks, river banks, under flyovers and near areas of economic opportunities.

 

 

 

3.2         There is increasing emphasis on housing, as it was realized that increased private investment in housing will have direct influence on generating economic growth, create employment opportunities – particularly, for the migrant workers in the informal sector, while increasing affordability[2].

3.6         Maharashtra is implementing a controversial Slum Redevelopment Scheme through cross-subsidy model (Down to Earth 2007). Costs of rehabilitation are raised by market mechanism -by selling floor space constructed from additional built area permitted. The slum dwellers contribute 20% of project cost, gets an apartment of 225 square feet on secured lease for 30 years.

 

4.4         The informal sector accounts for 66.7% of total employment in Delhi and 68% in Mumbai. (Srivastava 2005). Large slum clusters in Indian cities are a mix of small scale manufacturing and dwelling units for the population. Most employ typically 5 to 15 workers to manufacture low cost products and derive completive advantage by ignoring environmental and labour regulations[5].

4.5         Despite the recent acknowledgement at the Central government level about the linkage between shelter and livelihood for the urban poor, the same understanding is yet to percolate down to the project implementation level. Maharashtra’s policy of relocating slum dwellers in tiny tenements in multi-storeyed buildings and without opportunity for home based trading or manufacturing is a questionable proposition.

4.6         Lastly, the housing policies had not considered the issue large stock of vacant houses.  In Delhi, the percentage of vacant houses to households had increased from 3.06 per cent in 1961 to 15.08 percent by 1991 (Gill 2007). This raises question regarding appropriate rental law, for optimum utilisation of existing housing stock.