India’s President Pranab Mukherjee has been pushing the country to move towards a new housing system.
But he’s also pushing for a much smaller government and a focus on “smaller and more targeted” investment, with an eye towards making India a “sustainable” and “truly equitable” place to live.
On Tuesday, the finance ministry unveiled a new proposal to build 500,000 affordable housing units by 2022.
It aims to generate up to $1.7 billion in private investment for the project.
The government has been using a formula of creating 10-20,000 units per year over five years, with about 80 percent of the units expected to be affordable to low- and middle-income households.
The finance ministry is now looking at what kinds of affordable housing will be built, how they’ll be financed, and what types of projects they’ll target.
The first of these projects is an ambitious $1 billion residential housing project in the northern city of Hyderabad, about 30 kilometers from Mumbai.
India is a country with one of the world’s highest poverty rates.
It has an average of 5.8 million people living below the poverty line, the International Monetary Fund says, and nearly half of the country’s urban dwellers live in poverty.
A survey of 6,000 people by The Hindu and a McKinsey Global Institute study in January found that almost all of India’s cities have seen an increase in poverty in recent years.
“In the next five years alone, we will see an increase of 40,000 homes built,” Mukherjee said in an interview with a group of reporters after the launch of the new proposal.
“We are going to put that on a permanent basis.”
The new housing proposal is the result of the government’s ambitious 10-year plan to create 500,00 affordable housing in the country.
It was announced last month, and was also welcomed by Prime Minister Narendra Modi, who said in a statement that “the first step is to get the people to live in these new housing units.”
“The prime minister, I hope, will see it as a model to develop the country for the benefit of all,” said Manish Mehta, deputy chief economic adviser to the Prime Minister.
At the press conference, Mukherji also talked about the need to invest in infrastructure, including highways, water and power infrastructure, roads, and bridges.
According to the finance minister, the government will also look at “small-scale” and medium-scale infrastructure projects.
To fund the new housing, the plan envisions the government spending about $400 million a year to finance private investors.
In addition to a few billion in public funds, private investors will also be required to provide a minimum 5 percent stake in the project in order to secure financing.
The plan also proposes to build 3,000 additional units of affordable rental housing over the next two years, as well as a network of 200,000 new homes by 2021.
A new housing plan is in the works, but this one is aimed at a much larger government.
A government that is more efficient and less beholden to vested interests, and more focused on economic growth will have a greater chance to bring about a sustainable and equitable housing system, Mukerjee said.
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