While an open garage in most middle-class housing societies in Mumbai sells for around Rs500,000, the Tatas are planning to launch the world's cheapest homes at around Rs32,000.
The Tata Group, which launched the Nano small car at around $2,500 and Swach, a $20 water filter, now plans to target beneficiaries of the Indira Awaas Yojana – mainly the rural poor – by building 20-sq metre homes for as little as Rs32,000.
Named the 'Euro 500 home' (it will be priced at euro 500), the world's cheapest home can be built within a week using a kit comprising parts including doors, windows and roofs. The home kit has been designed by 15 innovators from the Indian and European operations of Tata Steel.
''These houses are typically targeted at beneficiaries of the Indira Awaas Yojana, that has an outlay of around Rs40,000 per house,'' says Sumitesh Das, head, global research programme, Tata Steel. ''The challenge is to make it cheaper and more acceptable to rural users because many pre-fab manufacturers have built demo homes across the country that have failed to gain popularity.''
According to Das, Tata Steel innovators have worked out two to three designs and are awaiting feedback. ''We should be able to roll them out nationally over the next six to eight months,'' he says.
In a significant move to expand the market for its product, steel, Tata Steel will also launch other versions, including a 30-sq metre home kit, with features including a solar panel, for around euro 700. Das pointed out that a pilot project involving the basic model was being executed in West Bengal and 30 more pilots would be taken up during the year. ''We will be rolling out these highly affordable homes by the year-end on a national scale,'' he added.
Consumer feedback from different parts of India during the pilot stage would be analysed before the designs are finalised. ''When we did our first pilot, we realised that people in the rural areas sit on their varandas,'' he said. ''If we incorporate the varanda, the buying is much higher. Similarly, since families in the rural areas share the same roof with partitions, we will have to accommodate such needs in our designs.''
The rural resident has to have a small patch of land on which the company will erect the 20-sq metre home within a week for Rs32,000.
Besides steel, the company will be acquiring other components made out of different materials. It is in talks with agencies including the jute and coir boards and is also discussing with state governments about supply of the 'nano' home kits for the poor.
He said their homes are not going to look like steel godowns since they consist of significant non-steel component as well. Tata Steel is currently in talks with several agencies including the coir board and jute board for wall cladding and other interiors.
They are also in talks with various state governments that are taking up housing programs for the economically weaker sections.
Tata Steel is also in talks with various manufacturers for setting up of facilities at various locations in the country, apart from integrators and village panchayats for the feedback. Das said localized manufacturing facilities help generate employment.
''We will have the designs and the manufacturers will enter into MoUs with us for producing them locally,'' he said.