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Q i) what are the market realities in the bottom of pyramid market in India as well as housing is concerned? Ans i) In the bottom of pyramid companies offer products at low prices and margins. The housing for lower income households is quiet poor, they share toilets, live in a single rented room subject to constantly rising rents that higher rents to be paid, harassed by the landlord. India's housing shortage is estimated to be 35-45 million and demand from the low income segment constitutes a large proportion of this shortage. In the recent past, several institutional efforts have been made to improve access to loan financing for these low-income households. In particular, shelter finance and community finance mechanisms have expanded. Housing microfinance delivers housing finance to low-income people based on mechanisms first developed for the delivery of micro-enterprise loans. Low income households tend to build gradually and incrementally, often building only one room at a time. This process of progressive housing or progressive build. Housing microfinance (HMF) is often said to lie at the intersection between traditional mortgage finance and micro-enterprise finance. For instance, the amount and the tenure of the loan are typically much smaller and shorter in HMF than in traditional mortgage finance. Another major issue is absence of large scale digitization of land records and the easy access to such records for checking titles/encumbrances. Government bodies can consider single window clearance mechanism for the purpose of further simplifying the approval processes for low cost affordable housing along with reconsideration of the taxation policies. The public agencies and the state and local governments should work to bring efficiency in land market, approval processes, provision of efficient infrastructure and governance viz. introducing electronic record for land and bringing in more transparency in the record of land and houses, etc. The credit risks originating in the housing sector, particularly low ticket housing segment, should also be internalized through proper insurance schemes for banks and other lenders. The various stakeholders should aim at timely

completion of projects, delivery of houses/flats to target segments without cost escalations and with valid titles and all necessary clearances.

Q ii) DO you believe that Tata model is sustainable? (Assuming the facts given the case) Ans ii) Tata housing was set up with objective of providing quality life space through continuous innovation. It identified the areas of cost reduction and underwent into low cost housing model. It conducted business fairly, transperantly, strive for excellence in day to day work, they ensure their social responsibility an s what comes from people goes back to people. It was previously on premium segment and moved to low cost housing project subh griha. As it promises to deliver smart value home with enormous amnesties to consumer of low income group at attractive prices. And the Britishers also did not care for the poor people, the low income group. And as the poor people were having scarcity of even basic living that proper houses, that serves as the basic needs according to Maslows hierarchy, so far the humanity is concerned Tata Housing project is sustainable, seeing the principles of humanity, Tata Nano Home subh griha gave the opportunity to the poor people to get free from staying in the zamindars or landlords premises. In the face of Rent control Act , which led to various problems like deterioration of housing stock , difficulty faced by the private sector in the lack of procedural clarity , cumbersome procedures for registration of property transactions, Tata Housing project continued to go for low cost project to help poor. So, despite of lack of procedural clarity, cumbersome procedures for registration of property transactions, Tata Housing project went to serve the poor people that clearly show that they can sustain their project irrespective of any given circumstances. To promote Housing system, Government established National Housing Bank, so this National Housing Bank, also helped the project of Tata Housing with financial resource. 90% of hosing was in poor and Lig segment, and new housing and habitant policy was focused more on urban

housing, and Tata housing going for project for poor people in this scenario was actually helping the poor people in rural areas. Further considering high transaction cost like stamp duty, property taxes, etc. Approval process was very slow in spite of this Tata Housing went for poor people house project is considered to be sustainable. Other private players were targeting only to middle and higher income segments, for more profits, but Tata housing went on targeting poor people with low cost housing, so it was ethically right. Moreover as, 90% of the people were having insufficient houses so, Tata Housing by catering to need of low income group will be generating more market share as well s more revenues . Also the states provide tax exemptions to those going for affordable housing; therefore Tata Housing project will be benefitted by going for such low cost housing for low income group segments by having tax exemption hence forth cost of construction will automatically come down. Also bulk purchasing will help to maintain good value chain and lower procurement costs which will help to make the housing for such segment more affordable, there it will also ensure profit up to some extent so, Tata Housing model will be sustainable. Innovation in housing finance will also help in success of the company. So it will be sustainable for Tata housing. Tata housing pays land owner after it gets payment, also it procures steel from its own company Tata steel and builds two storey building with light weight concrete , construction cost will be much lower than other companies henceforth it is sustainable for Tata Housing as construction cost will be low ensuring profits. It expects revenue of 700 crore in next four years. It also will have opportunity in industrial belts.