Slum finances in Madras

Abstract

Shelter is one of the basic human needs. It is next to food and clothing. A house is per Se a place of dwelling, though it does generate income by way of letting a portion of the house and/or operating an economic activity within it. It is especially so in the areas of economically weaker sections (EWS). Thus, owning a house is closely connected with gradual improvement in the standard of living. Construction, owning and sustaining ownership of a house by the EWS involves two major attributes: namely, the economic c~~p~lbility of EWS and the provision of shcltcr by the govcrnmcntal agencies, including finance. Indian cities have long cxpcricncc in provision of houses to EWS. However, the stud& available indicate that the mcrc provision of houses/house sites to EWS of the city population has neither improved the standard of living nor has it guaranteed the sust~linat~ility of that ownership by the EWS. It has been made clear that houses available for EWS are, by and large. below their economic capacity. Even when they arc capable, most of the time they arc not encouraged to mobitisc finances to build or to upgrade their houses. India, with its vast Con~pIcxities, has been finding it diffic~ilt to provide meaningful economic opportunities of living, particularly for the EWS. Formally loanable funds are as scarce in India as in any other developing country. Further, the competing forms of utilisation of funds result in high interest rates and complicated procedures to obtain loans, which in turn keep the EWS from availing thcmsclves of formal loanablc funds. The National Housing Bank, which should finance housing activities in the country, is a welcome attempt, although it is too late it was established in April 1988. Both the Draft National Housing Policy and the National Housing Bank seem to have a bias towards the middle and upper middle/upper income households, as any other new programmes have in the past. It leads to the conclusion that the National Housing Bank is not essentially meant for the urban and rural poor. It is explicit when it admits that “the group’s task is limited to dealing with the problems of encouraging the flow of finance to the non-subsidised sector”. Formal housing finance is still made difficult by socio-cultural, informational and spatial barriers to EWS. In such cases, housing policy for the EWS needs either to incorporate an economic instrument to upgrade the skills of EWS so as to make them able to earn more, along with provision of housing components, or to provide readymade houses. What is the choice of policy-makers today? What seems to emerge is greater attention to economic inputs while providing shelter. This paper attempts to reveal the circumstances by which and the extent to which the EWS are made to mobilise finances formally and informally. What are