Independence Day Anniversary: Housing Sector on a Path to Development

On the occasion of country’s Independence Day anniversary, we decorate our houses, hoist flags on buildings and celebrate our freedom. Over last decade, our country has shown significant progress in all sectors, housing sector is no exception. Government is highly focused on development of the housing sector and has launched transformational plans such as PMAY, touching lives of all segments & strata. This has brought a transformational change in the other industries, aside housing.

Do you know housing sector is interlinked with 269 other industries?

Yes, it is so…Cement, steel, paint, finance and the list continues ranging from small to large, businesses are interlinked with directly or indirectly with the housing sector. To empower people take a home buying decision, government is providing subsidies on home loans and construction of houses. Now, the Credit Linked Subsidy Scheme (CLSS )under Pradhan Mantri Awas Yojana (PMAY) has been made available for people earning up to Rs. 18 lakh per annum.

Additionally, several positive steps such as Abolition of Foreign Investment.
Promotion Board (FIPB), ease of investment norms, subsidy to high ticket size home loans is encouraging aspiring home buyers.

Ajay Sinh Rajput from Ahmedabad dreaming from 7 years and now owns a house, thanks to home loan subsidy under CLSS

A developed housing market relies on well-developed home loan market. Housing finance in India accounts not more than 8% of GDP compared to 29% of Malaysia, 46% of Spain, 80% percent in Spain & 12 % in China.

India is a developing economy and housing sector can play a pivotal role in making it a developed economy. The sector needs robust investment to make a significant impact on the country’s GDP, employment and consumption pattern. The requirement is funding & infrastructural developments, which is possible largely with foreign investments. The housing finance industry is growing largely with the growth of Non-banking Financial Corporation (NBFC). A myriad of factors such as borrower’s credit history, ability of financing institution to secure collateral, macroeconomic stability impacts the housing finance.