Approach to Housing Development

A Failing Housing Program
Despite the allocation of considerable funds by central and state governments, the housing program for the poor is failing for a number of reasons. The plan is ill-conceived, focusing on offering shelter as opposed to improving living conditions, and executed without sufficient thought about many inter-related considerations.
While the government is the main promoter of housing schemes, several non-governmental organizations (NGOs) and social entrepreneurship ventures have also entered the arena. For the most part, NGOs have to rely on donor funds that are hard to come by, and therefore their contribution has not been significant. Social entrepreneurs who expect a certain return on their investment are focusing on lower-middle-class customers who are able to repay a mortgage or pay adequate rental; these investors have not found a suitable financial arrangement to offer housing to those who cannot pay the high interest rates (ranging from 18% to 36%) that are usually charged.
Currently, the total supply of new housing is far short of the 100 million units that are needed at the very least, if the goal is to offer adequate housing for every poor family. Bad construction and poor maintenance are causing the breakdown of houses that were built some time ago, adding to the need for substantial home improvement.
Further, many homes were built without considering the size of the family or its likely new members, and consequently, they are simply too dense or congested. The average floor space of 38 sq. ft per individual, not including the space taken by cattle, creates a very unhealthy and uncomfortable indoor environment.
The focus on offering houses as "shelters" has motivated the government to look for cheap construction without offering even basic necessities. Without a small separate kitchen and adequate cross ventilation, for example, the entire house is turned into a smoke stack not suited for human habitation. The absence of an adjacent toilet with each house is inconsistent with any reasonable concept of meeting minimum human needs. Unless existing houses are extended to include a separate kitchen with proper ventilation and a small toilet, they cannot be considered "livable" dwellings.
Additionally, government housing perpetuates the centuries-old practice of separation of residences based on caste. Instead of trying to break down this discriminatory practice, houses being built by the government for the "scheduled castes" ensure this separation. Further, the government has created a number of identical structures in new areas, effectively creating "scheduled caste colonies." It is hard to reconcile the government's official position concerning discrimination and human rights, and what it actually practices.
Approach to Housing Development 
The Government of India and State Governments have adopted a two-pronged approach to housing development for the poor in the past, i. e., sites and services and permanent housing. Under sites and services, basic infrastructure facilities like drinking water, internal roads, approach roads, drainage, community toilet, etc., were provided to develop layouts. The beneficiaries were also given construction assistance for erecting a small shelter. The permanent housing programme, which has replaced sites and services, was initially confined to those beneficiaries who could avail loan facility. Later, several modifications have come up in the programme to address the housing needs of different target groups. The broad elements of the approach of the Government of India to tackle the problem of housing the poor are: special programmes/targeted subsidy to the poor and vulnerable groups, loan assistance to governmental agencies/beneficiaries at below-market interest rate for housing and at normal rate for infrastructure through the Housing and Urban Development Corporation (HUDCO), creation of housing assets as part of employment and income generation programmes, promotion of cost-effective and eco-friendly building materials and technologies and creation of an enabling environment for private sector initiative. Indira Awas Yojana (IAY) is an example of housing for targeted groups in rural areas through employment creation.