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India needs over Rs 100 lakh crore to fulfil shortage of houses by 2022, says RBI

Financial Express 2019-09-09 19:13:12

The Modi government has set an ambitious target of providing housing for all Indians by 2022, but it will need an investment Rs 100 lakh crore to meet this goal. The country needs to build 10 crore more houses, says a Reserve Bank of India report. Many people live in poor-quality housing, or without housing altogether. Despite policy focus and sustained government efforts, India still suffers from a housing shortage that could increase with rising population, added the RBI report. Out of the total shortage across Economically Weaker Section (EWS), Low Income Group (LIG) and Middle Income Group MIG, the lower-income group segment has the maximum shortage of 5 crore houses. The shortage of housing is present across all states and all segments. 

The stock of housing in India requires significant upgrades, especially as incomes rise with economic growth. Poor or non-justiciable legal and economic rights to the property can lead to shortages and poor quality of housing,” says RBI. 


The Indian government has set up its goal of creating shelter for all by 2022. The RBI points out that achieving this ambitious goal will require significant public and private investments. The government will continue to create housing in both rural and urban areas but such construction will cater only to a small proportion of the underlying demand. The central bank highlights that a large proportion of the demand will have to be met by the private sector, including private individuals buying from private builders and financed by various banks and HFCs. 

Housing continues to remain one of the largest investment avenues for Indians as the value of the housing market is Rs 150 lakh crore, which is greater than the market capitalisation of equity markets. In spite of its large numbers, the shortage of housing is material both in terms of the number of houses and the value of housing. The report has underlined that the states that have higher per-capita incomes tend to have lower housing shortages.