Tuesday, 21 February 2017


Out of number of provisions in the budget, the one on Affordable Housing can be a game changer. Here is my take:

In terms of Indian growth story, most of the analysts bank on the Demographic Dividend. However, the demographic dividend may turn out be the demographic disaster, If the government fails to provide employment to the youths of the nation.

It is estimated that construction of a 60-square meter house can generate 3000 man-hours of employment. Since the government is targeting to build 1 crore houses , the employment issue can be tackled with ease. This can bring in the spending power in the hands of larger population.

A house is not only an empty building; it needs electricity, furniture, paints, white goods and many more things. So, there is large number of indirect beneficiaries too.

Normally, affordable houses are constructed away from the main city, which needs new roads, transportation facilities and other civil infrastructure to support the residents in the localities.  Auto industry (both passenger and commercial) thus stand to gain.

Instead of buying costly houses, if house prices are affordable, it will reduce amount of EMIs (monthly outflow) and thus more money will be available either for spending on other items or for saving and investments.

This can lead to expansion in many other markets (FMCG, White Goods, Entertainment, education etc) or it can increase the savings and thereby supporting the stability of country’s macro finances.

I feel, this one is panacea to break the vicious circle of “Lower Spending –Lower Investment- Lower Employments-lower spending”.

Now the Construction worker would say: I am not building the house, I am building the nation.

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