Syllabus: GS3/ Economy
In News
- National Housing Bank (NHB) has released the Report on Trends and Progress of Housing in India, 2024.
Key Highlights of the Report
- Banks dominate the housing finance market, accounting for 81% of total housing loans whereas the Housing Finance Companies (HFCs) contribute 19%.
- As on 30-09-2024, Economically Weaker Sections (EWS) & Low-Income Groups (LIG) accounted for 39%, Middle-Income Groups (MIG) accounted for 44% and HIG accounted for 17% of outstanding individual housing loans.
- Only 5% of buildings in India are classified as ‘green’.
Government Initiatives Driving Housing Sector Growth
- Pradhan Mantri Awas Yojana-Gramin (PMAY-G): Aims for rural housing development with a focus on affordable housing.
- Pradhan Mantri Awas Yojana-Urban (PMAY-U): Supports low-cost housing projects in urban areas.
- Urban Infrastructure Development Fund (UIDF): Boosts infrastructure financing for affordable housing.
- Affordable Rental Housing Complexes (ARHCs): Focuses on housing solutions for migrant workers and urban poor.
Challenges in Housing Finance
- Regional Disparities in Credit Flow: Western, Southern, and Northern states receive the highest housing finance disbursements.
- Eastern and Northeastern states experience low credit penetration, limiting housing accessibility in these regions.
- Limited Reach of Housing Finance Companies (HFCs): HFCs play a vital role by providing flexible loan eligibility criteria and efficient service.
- However, HFCs have a limited branch network in rural and underdeveloped areas, restricting their ability to bridge the housing finance gap.
- Low Adoption of Green Buildings: Challenges remain there like higher initial costs of eco-friendly construction, lack of incentives for developers, and limited awareness on sustainability.
Opportunities for Growth
- Technological advancements in construction like use of AI, data analytics, and predictive modelling, 3D Printing and the digitization of land records are identified as factors that could facilitate growth in the sector.
- Increase in funding and growing demand for smart cities and affordable housing in metro and Tier-II & Tier-III cities causing demand to go up.
| About National Housing Bank (NHB) – Founded: In 1988, under the National Housing Bank Act, 1987. – Objective: To regulate, promote, and develop the housing finance market in India. – Ownership: 100% owned by the Government of India. – Regulation: NHB supervises HFCs, while the Reserve Bank of India (RBI) is the primary regulator. – Functions: Encourages financial inclusion by improving access to housing loans for the middle-class and low-income groups. – Bridges the housing finance gap by expanding credit facilities to underdeveloped regions. – Headquarter: New Delhi. |
Source: PIB
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