Easy access to institutional financing, and higher limit on external commercial borrowings (ECB) will attract more investments and ensure sustained growth of affordable housing in India, National Housing Bank (NHB) CEO Sriram Kalyanaraman said.
The foreign direct investment (FDI) and foreign institutional investors (FIIs) will play a key role in boosting supply of houses and infra projects in urban areas, he said at an Assocham event here.
"On the other hand, long-term financing at lower rates will reduce costs of construction for developers allowing them to pass on benefits to consumers.
"Also, in India there is a need to develop a secondary mortgage market either in the form of RMBS (Reverse Mortgage Backed Securities) or Covered Bonds. Simplification of external commercial borrowing (ECB) guidelines has opened a new window of funding for housing finance companies in India, increasing the prospects of a fresh round of overseas borrowings," he said.
The Real Estate Investment Trust (REIT) is another instrument that has potential to transform the Indian real estate sector, especially in commercial real estate and rental housing. The advent of REITs in India has been greeted with a lot of enthusiasm by many market players, he added.
"For addressing these issues, the government has taken various steps to improve urban infrastructure like Swachh Bharat Mission (SBM, urban), Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Heritage City Development and Augmentation Yojana (HRIDAY), Smart Cities, and Housing for All Mission. Under the Smart Cities Mission, 99 cities have been selected with a total outlay of Rs 2.04 lakh crore (USD 31 billion), " he said.
Despite being centres of opportunity, the cities of India bring with them a host of environmental and infrastructure challenges, from pollution to lack of civic amenities like drinking water, sewage, housing and electricity, which disproportionally impacts the more vulnerable poor population, he added.
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