Shelter has been one of the basic necessities of human life and the objective of "Shelter for All" is one of the major items on the Agenda of the United Nations Centre for Human Settlements (UNCHS). There is an estimated shortage of about 22.44 million dwelling units in India till the end of the 10th Plan Period which would need a massive investment. By 2010, the Government through its national agenda with priority on housing sector has decided to focus on the housing needs in general and that of the poor and the deprived, in particular.

The approach paper on the 10th Five Year Plan aims annual target growth of GDP of 8.0 percent which will call for stepping up the gross investment rate to 32%. The document indicates that out of the present gross investment rate of 27.8% of GDP, foreign investment accounts for only 1.5 per cent while the domestic savings finances for 26.3 per cent of it. Out of the total domestic savings again the household savings alone form a major share of about 19 percent while the corporate sector savings contributes only 4.9 per cent of the GDP. 

Therefore, it would be unrealistic to depend upon the corporate sector to take care of the entire needs of the housing sector. A tentative estimate of funds to meet the present housing shortage puts the figure at a staggering Rs.1.29 lakh crores. Since a major part of the housing shortage relate to the urban and rural poor, the corporate sector is unlikely to be interested in it as a profitable venture. A realistic solution is channelising the household savings to the housing sector by making rental housing an attractive investment outlet for average middle class households which now-a-days saves it) the usual forms of fixed deposits in banks, mutual funds, UTI and such other instruments. But this will require liberalization of the existing Rent laws which protect existing tenants but inhibit invest in housing and therefore discriminates against future; and potential tenants. 

One important reason for the low performance in public housing sector has been the inability of State Governments to furnish guarantees for taking loans from financial institutions like HUDCO/HDFC etc. 

In this background, a new initiative has been taken by the Honourable Prime Minister and a new scheme called Valmiki Ambedkar Awas Yojana (VAMBAY) was launched very recently to meet the housing needs of slum dwellers. This scheme has a special sanitation component also called Nirmal Bharat Abhiyan through which the sanitation needs of the slum dwellers are proposed to be met in addition to their housing needs. This new scheme, VAMBAY, is applicable to all urban slums in the country with 50% Central subsidy of Rs.12,000/- crore  per year during the 10th Five year Plan with a matching amount to be contributed by the State Government/local Bodies by way of loans from HUDCO or other sources.

Through this programme the Government will be concentrating on providing not just shelter to the urban poor but also a healthy and enabling urban environment. Under VAMBAY, during the 10th Plan period it is estimated that about 4 lakh dwelling units will be constructed the unit cost of a dwelling unit having been fixed in the range of Rs.40,000 to Rs.50,000 depending on the size of the city population.

Even though foreign direct investment may not immediately flow in a big way in the housing sector still it is likely to be a step in the right direction towards solving the massive housing problem. There is no denying the fact that housing sector is one of the largest employment providers in urban areas. This Ministry had got a study conducted by two experts of the Indian Institute of Management, Ahmedabad, who had in their report come up with certain valuable findings. Their report clearly pointed out that the construction activity in the housing sector not only generates income but also creates large scale employment opportunities. The employment, multiplier is about 7.76 indicating that an additional unit expenditure in construction sector induces about eight times the direct employment generated in the construction sector itself. Similarly the income multiplier is of the order of 4.71 i.e., a unit increase of expenditure in the construction sector generate five times that income indirectly. In fact the construction sector ranks even higher than important sectors of economy like transport and agriculture in terms of income generation. It is also relevant to mention that 40% to 46% of the unskilled labourers in this sector are women. There is, however, no denying the fact that there is need for properly grading the construction agencies according to their capacity, competence, turnover and credit worthiness so that a proper rating of  these agencies is also possible. The Construction industry Development Council is at present seized of this matter. 

There is also a need to comprehensively address the housing problem in the country through a multi-pronged approach by extending fiscal incentives at various levels to HFIs Corporate Bodies, NGOs, CPOs and individuals. There is also a need to amend the existing provisions for adoption of model regulations by the States by way of amendments to the existing acts relating to Income tax/Transfer of Property Act/Stamp Act/Registration Act.  Other measures include resolution by State Governments adopting the repeal of the Urban Land Ceiling Act, adoption of model regulation for land control, model law for housing cooperatives, registration of developers to ensure accountability as also promote alternate security arrangements to enable access to finances from HFIs.