Estimation may vary from time to time, from person to person, from institution to institution and from agency to agency, but the fact remains the same – India’s housing needs are massive. The government statistics show that urban housing shortage in ndia is declining from 18.78 million units in 2012 to 10 million units in 2017. Though there may be some truth in it as the government has embarked upon the task of providing houses to roofless population and also through other programmes like slum rehabilitation, etc., housing need will be massive due to rapid urbanisation and also due to replacement (and redevelopment) needs. Also, with rising income level, standard of living too will improve with which people will start shifting from congested dwellings to more spacious and comfortable units.
The government has aimed to provide housing for all by 2022 and even if it succeeds in achieving its goal by then, it doesn’t mean that pace of housing activity will cool down thereafter. Further, there will be need for commercial and industrial units as the economic activity picks up and India sustains to lead the rest of the world on growth path. Thus, realty sector, be it residential or commercial or industrial will always remain bustling with activity.
The government has undertaken several steps to make houses affordable to common man. The government has granted infrastructure status to affordable housing projects which will enable these projects to avail the associated benefits such as lower borrowing rates, tax concessions and increased flow of foreign and private capital. The government has brought down GST on affordable houses to 8%. Through Credit Linked Subsidy Scheme provides, credit flow in institutions to meet housing needs of the urban poor.
In short, there will be massive need for houses and as such there will be massive construction activities in the coming years. This is a cause of concern for all of us as around half of all non-renewable resources mankind consumes are used in construction, making it one of the least sustainable industries in the world. Nearly 50% of energy and water consumed is for construction activities and many natural resources like stones, lime stone, granite, etc. are also used on a massive scale. Large area of agricultural land will have to be converted into non-agricultural purposes and used for construction. Trees will have to be cut for both making space available and also to use timber for construction. We have already seen the impact of construction on environment and its resources and we will be witnessing even larger and faster destruction of natural resources in the coming years unless our better sense prevails.
So, construction and environment have had an uncomfortable co-existence till now but cannot sustain it for too long unless we are ready to sacrifice many needs of our future generation. Environment destruction may intensify as the developers look out for cost control methods to make houses more affordable through various ways and means which may harm environment more than it did in the past. So, there is need to find a way to ensure that affordable houses are built in environment friendly manner. We need to move further from affordability towards greenability.
The government need to encourage green development the same way it is helping in construction of affordable houses. The government should incentivise the green construction and one of the better ways of doing the same is through providing easy finance to green projects through concessional rates and on easy repayment schedule. For most of the developers raising funds for the projects is next to impossible thing and the government need to exploit this situation by indirectly forcing them to go green construction by making available the finance on easier terms. The government need to set up National Green Fund as was suggested in last Economic Survey.
Green financing usually ensures that the projects funded by the Green Funds are at lower risk of being subject to liabilities under environmental law by the National Green Tribunal and courts as the greenness of such projects are already established at the time of project vetting by Green Funds. For financial institutions, green financing will help to enhance their image as they are often being subjected to character assassination for being associated with polluting projects. This may also help the financial institutions in their future fund-raising program.
At the same time, developed nations should stop crying hoarse at environmental damage by construction activities in developing world as they have failed to loosen their purse strings towards green projects in developing countries. For example, Pension Funds of OECD countries have funds to the tune of $ 28 trillion out of which hardly one trillion USD is used for green funding.
Reducing the environmental effects of construction requires a collaborative effort from many different stakeholders. While the government needs to create a friendly policy environment for promoting green construction, developers need to be less greedy and more honest towards promoting green techniques and the space buyers should encourage green construction by opting only for green buildings.