NEW DELHI: The aspiration of homeownership is becoming increasingly out of reach for low-income groups in India, as the availability of affordable housing takes a significant downturn. The Economic Survey 2025-26 reveals that the percentage of affordable housing units, priced under ₹50 lakh, in India’s eight major cities plummeted from 52.4% in 2018 to a mere 17% by 2025.
This substantial drop occurs amidst a forecast that demand for such housing will hit 30 million units by 2030. Currently, the overwhelming majority of this shortfall is among low-income groups, which represent 99% of the housing deficit in recent years.
The Peripheral Dilemma
The survey points out that to maintain project viability, developers are increasingly relocating to the outskirts of urban areas where land prices are lower. However, these peripheral sites often lack the essential “bloodstream” of city life:
Infrastructure Gaps: These locations frequently encounter inadequate public transport systems and poor connectivity to key employment hubs.
Service Deficits: Basic civic amenities are often absent, undermining the long-term livability and attractiveness of these affordable housing clusters.
A Call for Rule-Based Reform
To tackle this “unfinished promise” of urban housing, the survey proposes a structural overhaul in planning. Recommendations include:
Rule-Based Approvals: Transitioning from discretionary case-by-case exemptions to established floor space index (FSI) and height regulations.
Targeted Planning: Mandating that every million-plus city develops a statutory 20-year plan that incorporates a housing supply strategy with annual unit goals.
Land Value Capture: Connecting housing development with infrastructure corridors to ensure residents have access to both homes and job opportunities.
While government initiatives like the Pradhan Mantri Awas Yojana-Urban (PMAY-U) have resulted in 96.02 lakh houses being built as of November 2024, the survey stresses that only a comprehensive rethinking of urban density and land utilization will effectively address supply constraints in India’s most productive cities.
