Role of state and market in housing delivery for low-income groups in India

Despite the importance of housing, it has generally received very low priority in India's public policy and investment program, which has changed frequently since independence in 1947. Although the government has embarked on a variety of innovative housing programs and policies, especially for the lower-income segments of the population in urban areas, the coverage of these programs and schemes is marginal as compared to the overall housing requirements of the urban population. A concerted effort by the public and private sectors has not been able to keep pace with the growing demand for urban housing, especially that market segment accessible to the urban poor. The most visible manifestations of state and market failure are the numerous unauthorized housing settlements scattered in and around the large cities of India. This paper reviews the role of the state, the market and non-governmental organizations (NGOs) in the provision of housing for low-income groups. It is found that formal housing agencies in both the public and the private sector are neither building fast enough to meet demand nor cheaply enough to reach the poor. As a consequence, an informal sector has emerged in almost all cities in India.