Affordable Housing and the Urban Poor in India

Abstract

Affordable housing signifies the importance of one’s capacity to pay for housing, and it is essentially a market-based concept. The fundamental difficulty with India’s urban poor is that some households simply cannot afford adequate housing at any stage. The interface between their poverty and the real estate reality in India makes affordable housing a distant dream. The article, using the National Sample Survey Office 68th Round Consumer Expenditure Data and India’s Consumer Economy (ICE 360) Data, tests Engel’s law to determine the disposable income of the poor for housing. The poor spend a greater share of their income on basic needs and do not have disposable income to pay for an affordable house. Data collated from a private property website for 22 cities show that the government’s approach of affordable housing through its celebrated flagship programme, the Pradhan Mantri Awas Yojana (PMAY) is far from the market reality.