Access to affordable housing is a prerequisite for a dignified life, yet it remains out of reach for many middle-class Indians. Discuss the current challenges and also propose policy measures to make housing affordable and accessible for all.


The finance minister announced two housing schemes in the interim budget – PMAY-Grameen for building additional two crore houses in the next five years, and a scheme to help middle-class individuals buy or build homes.


  • Introduce your answer by highlighting the importance of housing for dignified living.
  • In the main body, first address the challenges in realizing affordable housing – high Price-to-Income Ratio (PTI), structural reasons, semi-transparent real estate sector, limited financing options, rapid urbanization and population growth, etc. Next discuss the policy measures needed to make housing affordable and accessible for all – transparency in land markets, planned land supply, holistic approaches to housing affordability, enhanced public-private partnerships, etc.
  • Conclude by reiterating the need for structural reforms and holistic approaches to ensure sustainable affordability and inclusive growth.


A dignified life encompasses access to basic necessities, security, and opportunities for personal growth. Housing, a fundamental component, provides shelter, stability, and a sense of belonging essential for dignified living. However data reveals significant challenges, especially in urban areas where a substantial portion of households live in slums.

Challenges In Realizing Affordable Housing:

  • High Price-to-Income Ratio (PTI) in India: which indicates the difficulty for the middle class to afford housing. The average PTI in India stands at 11, more than double the affordability benchmark of 5.
    • Mumbai, Kolkata, and Chennai exhibit high rates of slum dwellings due to unaffordable housing.
  • Structural Reasons for High House Prices: Primarily due to structural issues within the real estate sector rather than a sudden spike in prices.
    • Lack of transparency in land markets contributes to inflated housing costs.
  • Semi-Transparent Real Estate Industry: India’s real estate industry ranks as semi-transparent, hindering competition and exacerbating price disparities.
  • Limited land supply due to inadequate planning and implementation adds to the problem.
    • Only 28% of Indian cities have approved master plans, leading to uncertain development trajectories.
  • Dominance of Few Developers and Supernormal Profits: these developers maintain high prices, further excluding the middle class from homeownership.
    • 77% of India’s household wealth is tied to real estate, indicating its significance in the economy.
  • Limited Financing Options for Middle-Class Homebuyers: like high interest rates and stringent eligibility criteria for loans contribute to the affordability crisis.
  • Rapid Urbanization and Population Growth: exert pressure on housing demand, leading to inflated property prices.
    • Increasing migration to metropolitan cities intensifies competition for limited housing stock.

Policy Measures Needed to Make Housing Affordable and Accessible For All:

  • Reforming Land Markets for Transparency: Implementing reforms to increase transparency in land markets will encourage competition and reduce prices.
    • Emulate Singapore’s long-term planning approach for sustainable urban development.
  • Focus on Planned and Transparent Land Supply: Government intervention should prioritize releasing land supply in a planned and transparent manner. This will not only lower housing prices but also stimulate economic growth and create employment opportunities.
  • Holistic Approach to Housing Affordability: Government schemes should address root causes
    • Integrating land-use planning with housing policies to ensure long-term affordability.
  • Promotion of Rental Housing: Encouraging the development of rental housing can provide an alternative solution for middle-class individuals unable to afford homeownership.
  • Enhanced Role of Public-Private Partnerships (PPP): to develop affordable housing projects can optimize resources and accelerate the pace of construction.
    • Joint ventures between municipal authorities and real estate developers to revitalize underutilized urban land for housing
  • Empowerment of Urban Local Bodies (ULBs): to plan, regulate, and monitor housing developments through effective governance and institutional reforms.
  • Use of Innovative Construction Technologies: such as prefabrication and modular construction can reduce building costs and construction time.
    • Implementation of 3D printing technology to construct low-cost housing units in a fraction of traditional construction time and cost.

Access to affordable housing is a fundamental right essential for a dignified life. Addressing structural issues within the real estate sector, such as transparency and competition, is key to making housing affordable for all. A holistic approach involving land market reforms and transparent urban planning is necessary to ensure sustainable affordability and foster inclusive growth in India.

‘+1’ value addition:

  • Between 2016 and 2020, the demand for housing in India’s eight biggest cities was 1.98 million units, while the supply was only 25,000.
  • House prices have appreciated by 9.3 per cent on an annual basis between 1991–2021.
  • 77 per cent of India’s household wealth is stored in real estate compared to 62 per cent for China, 44 per cent for the US, and 37 per cent for Germany.
  • According to the Census data of 2011, 17 per cent of all urban households in India live in slums.
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