Affordable housing refers to housing units that are affordable by low-income group (LIG), economically weaker section (EWS), and middle-income group (MIG) section of society whose income is below the average household income. The context of affordable housing criteria changes from time to time.
Across the world the definition of affordable housing vary country wise, however, the purpose of this is the same as providing housing units that meet the housing needs of the lower and the middle-income family. Affordable housing has become a widespread phenomenon among developing nations where the majority of the population cannot afford a housing unit at the market value.
- As per the Technical Group Report, economically weaker sections (EWS) and low-income group (LIG) cumulatively account for 96% of the total housing shortage in urban India.
- With the current trend of urbanization, about 40% of the population of India is expected to reside in the urban areas by 2030.
To address the issue of housing unit scarcity in urban and rural India for poor sections,the government has initiated several measures such as National Housing Policy, 1994; Jawaharlal Nehru National Urban Renewal Mission, 2005; Rajiv Awas Yojana 2013, the Pradhan Mantri Awas Yojana (PMAY) launched in 2015 provides a fresh impetus. The PMAY-Urban (PMAY-U) subsumes all the previous urban housing schemes and aims at ‘Housing for All’ to be achieved by the year 2022.
Under PMAY-Urban the government is expected to offer around 20 million affordable housing units. The government and the Reserve Bank of India have kept affordable housing under the preferential lending category, endowed with infrastructure status, provide tax subsidy (CLSS), and reduced GST rate from 8% to 1% to promote affordable housing schemes.