Public-private partnership suggested for housing the poor
By By Katya Naidu and Taapsi Ramchandaani, CNBC-TV18 | 13 Sep 2008
Public-private partnerships has worked wonders for the pace of infrastructure development in the country, and some experts believe it could do the same for affordable housing.
For people wondering where their next meal would come from, housing is the last thing on their minds. However, the government believes one of the biggest challenges to rapid growth is to provide housing to the weaker sections of the economy.
Data from the Eleventh Planning Commission shows that 99 per cent of housing deficit involves low-income groups and economically weaker sections. As of 2007, India is short of 24.71 million homes, and that figure could go up to 26.53 million by 2012.
In order to bridge this gap, experts suggest a route that was successful in bridging the country's infrastructure gap –– the public-private partnerships. This, they say, can speed up the process of putting up affordable housing, particularly, if the government plays a major part in securing the necessary licenses and approvals.
S Sridhar, chairman and managing director, National Housing Bank, said the transaction cost is quite high and could constitute between 10 per cent and 15 per cent considering the time spent in long procedures, stamp duty and obtaining approvals. ''It will be easier if we can provide fast track approvals for affordable housing in public-private partnership since government agencies are involved.''
However, this model is still a proposal, and needs government approval. Experts feel that issues regarding land acquisition, particularly, in the metros and larger cities are the biggest drawback in the model.
However, if this hurdle can be overcome, it may be the answer to the government's concern of pushing growth through the roof.
