The Right People for Right Job

by Ashok Khosla

In no sector of the national economy are the roles of the min actors more mixed up than
in low income housing. Government has assumed many functions that should be done
by the private sector. Voluntary agencies have taken on responsibilities that properly
belong to government. The private sector deals only with the most profitable
opportunities, mainly by catering to the demands of the urban rich. And the
homeowners/house builder waits, in an ever growing state of dependency, for someone
to come, provide finance and do his work for him (or occasionally, her).
Given the general breakdown in the institutions of house-building on the one hand and
destruction of the natural resource base from which building materials are made on the
other, it is only to be expected that the current solutions in this sector are not optimal.
But, even allowing for this, the decline in our country’s ability to meet the shelter needs of
its citizens is accelerating at an alarming rate. The gap in rural housing continues to
grow, despite attempts by officials to solve the problem by the simple stratagem of
redefining what constitutes an “adequate” house.
The universal aspiration to have “a roof over one’s head” is a clear expression of how
fundamental is the need for shelter. In most circumstances, it is probably next in priority
only to air, water and food. But unlike most other basic needs, a house requires capital
investment, specialised skills and cooperative effort. And even when it is largely non-
engineered and built by self-help” it also requires land and access to building materials.
For all these factors to come together and produce houses in large numbers, each sector
in society must have clearly defined roles and responsibilities.
Government (at its various tiers from the national to the local) has to provide the
legislative framework needed for all the other sectors to be effective – and to ensure
access by house-builders to land and finance. This does not mean that it should, as it
does today, buy and sell land, operate banks and actually build houses. It must, rather,
lay the basis for real estate transactions, housing loans and construction activities to
occur efficiently and equitably within the framework of the market place.
One of the most important missing links today is research and development, without
which the building techniques and materials needed to attack the housing problem can
never be adequate. In any modern sector, it is essential to maintain a high level of active
R&D. Expenditures (shred between the public and private sectors) of one to three
percent of turnover in research pay for themselves many times over in improved
efficiency and reduced costs. Such R&D must be done in independent, private and
academic laboratories, not as at present by government agencies.
Construction activities, including the supply of building materials, should be commercially
viable and carried out by private enterprises. Similarly, retail finance has to be made
available by private banking institutions or by other mechanisms. To bring commercial
agencies from profitable urban markets into rural house construction, the economics of
such construction must be made more attractive through introduction of lower cost and
more profitable techniques.
Voluntary agencies and academic institutions have to take prime responsibility to develop
technology packages that can be used cost-effectively for house construction in both
informal and formal sectors. Through promotion and demonstration, they can have a
widespread impact in the choice of effective technologies and materials. Today, their role
is largely confined to issues of empowerment, shelter rights compaigning and awareness
generation.
Some four or five million houses in rural India need to be built or upgraded each year. If
the housing gap is to be closed in the foreseeable future, the key factors will have to be
aggressively provided by the respective sector: properly located land by the gram
panchayat, building materials by local enterprises, financing by the banks, innovation by
the independent and academic sectors. For the poor to take part in such a market based
housing system, they must build up their purchasing power – but that is the subject of
another story: sustainable livelihoods. q