The population in India is growing rapidly and this requires an expansion of amenities. A major deficit in the country is the lack of housing. This has led the National Urban Housing and Habitat Policy to set an objective of Affordable Housing for All as a key focus. The Government has set 2022 as the target year to achieve this objective by promoting urban housing. The technical group working on this objective has distributed the households in terms of per capita income into weaker sections, lower income groups, middle income groups and higher income groups.
The main constraint in the urban areas is lack of availability of land, lack of finance, increasing costs of construction and the low interest by private developers to venture into this segment. Realizing the housing requirements and the trouble in raising finance for the same, the Government has launched the Pradhan Mantri Awaas Yojana in 2015 to provide housing for all by 2022 in urban areas. The Budget has also made special considerations and offered incentives for this program.
Since the private developers only concentrate on the higher income groups when it comes to construction of houses, the Government had to take measures and develop this plan. To attract investment and participation by the private firms, the Government aims to give them incentives. The Budget 2016 and 2017 have given high priority to these objectives. Certain measures like 100% tax incentive on affordable housing projects, conferring of infrastructure status to affordable housing, reduction of long term capital gains tax period to two years etc. will encourage the participation of private sector companies in affordable housing.
Under the plan, the Government aims to construct 2 crore houses for the urban poor by the end of 2022, this will be done at the rate of 30 lakh houses constructed per year. The houses will be equipped with a toilet, water facility and electricity supply. The plan will provide central assistance to the Urban Local Bodies and agencies working through the States. All towns across the Country will be eligible for coverage.
The Budget has laid out various incentives and a 100 percent tax deduction for profits on the construction of affordable houses. In addition, the housing for all incentive will not be impacted by the implementation of GST. The scheme will be implemented as a Centrally Sponsored Scheme and the project has been given infrastructure status. Housing for all is a well thought out scheme which aims to reach at the roots of the Country, with direct incentives from the Government and the well laid out plan for providing incentives to private companies, the scheme will have a huge impact on the urban areas of the Country. It is difficult to say if the scheme will reach the target by the end of 2022, but it can be concluded that it is an ideal incentive that aims to provide housing to every segment of the society and is focused on one of most neglected income groups in the Country.