Over the past four-and-a-half decades, the Housing and Urban Development Corporation Limited (HUDCO) has gained experience and expertise in new and satellite towns, SEZs, IT parks, industrial infrastructure and providing design consultations for redeveloping towns, writes Dr. M Ravi Kanth, Chairman & Managing Director, HUDCO
The world today has become more urban than ever before, and this wave of urbanisation is not going to abate in the near future. This means that providing quality, affordable shelter for the millions of people streaming into our cities is among the most pressing challenges we face. Since shelter is a basic human need, the provision of housing to its citizens is a major obligation of India, being a welfare state. India faces a huge backlog of affordable housing and if left unaddressed, this could impede the social mobility of a generation and have a paralysing effect on the economic development of the nation.
- As per the report of the technical group on urban housing shortage for the Twelfth Plan, the housing shortage was 18.78 million units in 2012, three-fourth of it bein in the economically weaker sections of our society.
- To address this housing shortage, we need to provide for a mix of affordable housing options, good rental housing for migrants, slum redevelopment, and housing for urban destitute and homeless. Even building at full capacity, the major house builders will be unable to build the number of houses we need. There is an urgent need to leverage resources from the states to combine with the resources of the Central Government. Therefore, all stakeholders, including the private sector, banks and financial institutions and civil society, need to be involved in this task.
Reaching the unreached
HUDCO has contributed immensely for developing housing in the country. We are constantly striving to ‘reach the unreached’ sections of the population to make the housing dream a reality for everyone. During the last 45 years, HUDCO has sanctioned 16.25 million houses, and we are proud that every 16th house in the country has been constructed with HUDCO’s support.
Though we lend for middle-income and higher-income housing, HUDCO continues to place a significant emphasis on housing for the EWS and LIG categories, and over 95 per cent of the houses sanctioned by us have benefitted EWS and LIG households. Towards improving access to housing for all sections of the society, especially at the Bottom of Pyramid (BoP) of the society, HUDCO is trying to develop various products to cater to the needs of different segments of society. The ‘Rent-to-Own scheme’, and our equity support to SEWA Grih Rrin are important steps in this direction.
Profitability with social justice
With a motto of “Profitability with Social Justice”, HUDCO is the largest housing finance central public sector enterprise in India, addressing the housing and related infrastructural needs of the poor. Since inception, HUDCO has been promoting affordable housing, with an allocation of significant quantum of its housing funds for the economically weaker sections and lower income groups, a relatively lower interest rate (even below our average cost of borrowing), higher extent of unit cost extended as loan, and a relatively longer repayment period, HUDCO makes houses affordable for the urban and rural poor segments, by cross subsidising the economically weaker sections and lower income groups.
In addition to its direct-lending programmes through projects and individuals, HUDCO acts as the nodal agency on behalf of the government for implementation/monitoring the Government of India’s actionable programmes, such as the Integrated Low Cost Sanitation Programme (ILCS), Two Million Housing Programme, the National Network of Building Centres, Night Shelters, Swarna Jayanthi Shahari Rozgar Yojana (SJSRY) for training component, etc.
HUDCO has actively contributed to the implementation of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in respect of the components of Basic Services for the Urban Poor (BSUP) and the Integrated Housing and Slum Development Programme (IHSDP) for project report preparation, appraisal, monitoring, capacity-building as well as funding the viability gap requirements.
It is worth mentioning that the CSR activities of HUDCO also aim at improving the quality of life of the deprived sections through various projects relating to health, education and economic infrastructure in urban and rural areas. HUDCO has extended support to urban local bodies for construction of night shelters, community/pay and use toilets, among other projects to improve the living conditions of the deprived.
Building assets for the nation
Over the four decades of its existence, HUDCO has gone from strength to strength and has been a key partner with the government in building assets for the nation. Over these years, HUDCO has financed over 2000 infrastructure projects with a cumulative disbursement of over Rs. 64,000 crore.
We also provide design consultations for inner-city redevelopment and rehabilitation of disaster-affected areas. HUDCO has financed projects not only in small and large towns, but even in rural areas in the aftermath of natural disasters. In fact, HUDCO’s work extends from Kashmir in the north to Kanya Kumari in the south and from Kutch in the west to Kohima in the east.
- The integrated railway projects at Navi Mumbai
- Construction of a road bridge across Thane Creek at Airoli, Navi Mumbai
- Construction of airports at Cochin & Calicut in Kerala
- Borai water supply scheme on BOOT basis
- National Games Village at Bengaluru and Manipur
- Film City in Chennai
- Rain-water harvesting for Santhigiri Ashram at Thiruvananthapuram
- We are proud to be partners in the financing of innovative infrastructure projects like the metro rail projects and the Sabarmati riverfront development
HUDCO is supporting important initiatives through its equity partnership in the Delhi–Mumbai Industrial Corridor (DMIC), and its subscription to the Infrastructure Debt Fund (IDF). Through IDF, HUDCO will support the country’s infrastructure needs by catalysing capital formation for infrastructure development in the country.
Today, HUDCO is the only financing company which funds land acquisition and its integrated development. With the new government initiative for the development of ‘Smart Cities’ throughout the country, HUDCO’s role would continue in the fields of project funding, project monitoring, evaluation studies and also support to the urban local bodies in conceiving city-specific business plans for sustainable infrastructure development.
The way forward
India is taking rapid strides towards an urban future, where by the year 2030, urban areas are expected to house 40 percent of India’s population and contribute 75 percent of India’s GDP. This obviously requires large-scale investments and effective planning to ensure comprehensive development of physical, institutional, social and economic infrastructure and housing for all.
On 25th June, 2015, Prime Minister Narendra Modi had launched three schemes, ‘Housing for All by 2022’, ‘Smart Cities’, and ‘Atal Mission For Rejuvenation And Urban Transformation (AMRUT)’, to generate momentum and propel the urban development efforts in the country towards ensuring an improved quality of life in urban areas.
In this context, the Smart Cities programme aims at helping cities acquire better infrastructure, including water supply, electricity, sanitation, mobility, digital connectivity, sustainable environment, safety and security, health, education and good governance. Similarly, AMRUT also aims at creating basic urban infrastructure like water supply, sewerage network, storm water drainage, urban transport and green spaces and parks, and the Affordable Housing Mission seeks to address the housing requirements of urban poor, including slum dwellers through its four programme verticals.
HUDCO’s Corporate Plan-2020 envisages a major focus and thrust on social housing in order to achieve the national goal of affordable shelter for all. Besides, HUDCO has been identified as one of the central nodal agencies for the Credit Linked Subsidy Scheme component of the Affordable Housing Mission.