Thread: A market shift from state funding to private investment

Estimates made by the Central Statistical Organization (CSO) indicate that the gross fixed capital formation in residential buildings in the private sector, including public sector undertakings, amounted to Rs.3, 054 crore, in 1980-81. In present times this value has gone up several fold. If the investment made by the public undertakings is excluded, then the net private sector investment in housing during the period would have been around Rs.2, 980 crore. A study of former growth patterns by CSO indicates a rate of 12 percent per annum in the Fifth Plan. A 10 percent growth rate has been assumed for the Sixth Plan period on the basis of certain calculations.

In comparison, the Housing and urban Development Corporation (HUDCO), a state sector housing finance agency, formed in the early seventies, has up to the end of 1986, sanctioned a total of Rs.2, 306.40 crore as loans, which is less than the gross fixed capital formation in the private sector in one year. Till March 1990, the HUDCO has sanctioned over 6,700 projects costing about Rs.6, 800 crore with a loan commitment of about Rs.4, 200 crore. This is expected to mitigate the housing problem of about 3.8 million families in both the rural and urban areas. Out of these 80 percent is for the poor sections while 20 percent is for the Scheduled Caste (SC) and Scheduled Tribe (ST) families. Unfortunately, the state agencies are not availing the optimum benefit of HUDCO’s loan and subsidy for shelter programmes, by not forwarding sufficient schemes.

In the next decade, HUDCO proposes to provide shelter to around 10 million people in the country. During the Eighth Five Year Plan, it has been proposed to support projects with a loan commitment amounting to Rs.8, 000 crore, and to release loans to the tune of at least 6,100 crore.

When considering the volume of investments in an Apartment Kochi is ahead of other cities in Kerala, mainly due to the liberal attitude of the prominent government and the private lending agencies. Both in quality and the volume of investments, perhaps no other city in the state has seen such massive developments.

Do you think will be a general trend?

Very interesting facts about investments