Prof Amitabh Kundu is happy that Budget 2017 focuses on infrastructure, rural development and skill development. The former dean of the School of Social Sciences, Jawaharlal Nehru University, however, points out that the Narendra Modi government is not doing much regarding affordable housing for the poor and pension for unorganised sector workers.
The government, he claims, has caved in to pressure from the housing lobby. Kundu, who headed the Technical Advisory Committee on Housing Start up Index at the RBI and the Committee to Estimate Shortage of Affordable Housing, pulls no punches in criticising the affordable housing scheme and the new pension scheme, both of which, he points out, are tilted towards the richer sections. If the government has to realise it goal of affordable housing for all by 2022, the focus must be on the poor, he adds.
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Is there anything in the budget that worries you?
Firstly, affordable housing. Arun Jaitley said in his speech that it is a major area of concern. It is one of the flagship missions. It is fine that the PMAY allocation has gone up to Rs 23,000 crore, which I think is desirable. The Housing Shortage Committee had said that 95% of the housing shortage is for economically weaker sections and low income groups. So you can't have only 5% of the total housing expenditure coming from the public sector and 95% from the private sector if the target is low income groups and economically weaker sections.
If you look at the data for the housing sector, there are not many takers for loans. The poor are not coming forward to take the loan of Rs 3 lakh which the government has announced. They revised it from Rs 1 lakh to Rs 3 lakh generally and for the low income groups from Rs 2 lakh to Rs 6 lakh, but still not many people from those sections are coming in.
What is the reason for this?
It is because they don't have proper documentation. Also, they cannot repay even monthly installments for the Rs 3 lakh loan; even though they pay only 2% interest and the government pays 5% of the amount, the installment still comes to Rs 1800 to Rs 2,000 per month. So the poor, who have a monthly income of Rs 6,000 per household, can't pay Rs 2,000 for a housing loan.
Modi has announced housing loans up to Rs 9 lakh will get a subsidy of 4% now and loans up to Rs 12 lakh will get a subsidy of 3%. So, now that you have hiked the loan to Rs 12 lakh, you find the middle class grabbing this opportunity. That Rs one lakh saved because of the government subsidy is huge for them. A person from the middle class will not build a house for Rs 12 lakh. He may build it for Rs 30 lakh after taking a Rs 12 lakh loan, on which he he will get this subsidy. He is not barred from getting this subsidy. This is absurd.
So, the government's focus has changed?
Yes, the focus has shifted from the poor to the housing sector.
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