The 12th Plan working group on financing urban infrastructure
estimates the housing shortage in the country at nearly 29
million units. Most worrisome is that about 26 million units
pertain to the economically weaker sections or EWS (household
average monthly income up to Rs 5,000), whereas the shortage in
the low income group, or LIG, (household average monthly income
of Rs 5,000-7,500) is three million. An inadequate supply of
affordable housing is a key reason why at least half the
residents in larger metros live in slums or other informal
accommodation. To date, government housing policy has focused on
home ownership with little success. In contrast, many developed
economies have emphasized affordable or “social” rental housing,
which constitutes up to 20-30% of their housing stock. Most of
the social housing is provided by the government or by
associations that utilize government incentives. In the two
decades post Independence, housing policy focused on handing
over finished housing units to EWS or LIG