By Moin Qazi
Historians will tell you that an explosion of creativity occurs the moment the world starts complaining that there is nothing left to invent or that the search for solutions to complex problems has come to an end. This explosion is fate’s way of reminding us that there is always something just over the horizon of knowledge. Social entrepreneurs are now using their talent to seek better answers to tough social problems at a time when the world has never needed them more. To make money is not necessarily their first objective. Their first objective is to make a contribution.
One of the most challenging problems of our times is homelessness. A report Housing Microfinance in India: Benchmarking the Status by ACCESS-ASSIST in 2013 found that in India, the total housing shortage is 42.69 million units in rural areas. The same report detailed that out of the total number of people in India without adequate housing, over 90% of them live below the poverty line.
While we have been able to relentlessly fight poverty and continue to record improvements, homelessness remains a big challenge. The key constraint in providing shelter is that people do not have proof of being owners of the piece of land on which they live. This keeps them deprived of so many basic amenities. Once titled, they could obtain access to several government benefits. Even a small plot can lift a family out of extreme poverty. A decent habitat and shelter environment for the poorer sections can not only contribute towards their well being and real asset creation but also catalyse overall economic growth.
Priority for housing is higher than education and health. Sustainable and inclusive housing solutions, indeed, could bolster large economic growth quickly and efficiently. Rural housing space –particularly the lower tier in the economic pyramid – has remained largely unaddressed as many had tried and most found it a hard ground. The most elusive issue in housing finance is that of legal title. While many villagers own their homes, which they likely built themselves, they rarely own the piece of land which holds their dwelling. This is a major obstacle as many families may not have had documentation for generations and the process of obtaining and putting it in place is an impossible mission to accomplish without nimble titling, mortgaging and financing system.
Both the government and all major financial institutions have launched intensive programmes for providing financial access to the underserved segments of society. These include savings, insurance and remittance facilities and loans for livelihood and consumption purposes. A major deficiency in these initiatives is that most of them have ignored a very crucial need of the base of the pyramid segment. This segment lacks access to housing finance and, until the issues relating to properly documented title are not sorted, access to housing credit will remain a mirage.
Village panchayats can play a critical role in untying the knots. In 1993 the Panchayat Raj Act and an amendment to the country’s Constitution endowed the local village panchayats with functions of local governance. Typically, in rural India, villagers are granted land from government or live on land passed down from their ancestors. These are known as ‘para-legal titles’ (bill of sale, receipts for payments of taxes, etc.) that fall short of full legal title. Similarly many may not have a full land title but possess a documentary right to ownership, such as tax receipts and a legal protection from eviction. These para-legal rights often provide good security, ensuring permanence on the property and the ability to sell it to another household.
Mortgages typically require that households hold full legal title to their property. However, in many countries, most low/ moderate-income households have para-legal rights to their property. Local level initiatives for rural housing would also be able to develop mechanisms for addressing impediments (such as problems with titles) by building capacities to develop a title record system.
In as far as rural land rights are concerned, the local panchayat can fix some ‘permanent ownership tax’ and regularise titles. This will open for the occupants the gates for so many benefits from State-owned social programmes. Accordingly, State governments should use out of the box approach to break down the thickets of red tapism. What are actually required are revolutionary and cutting edge reforms that curtail the dense jungle of paperwork and documentation.
Apart from the huge outlay of outright grants for individual houses in villages, the flagship rural housing programme, Pradhan Mantri Awaas Yojana (Gramin) or PMAY-G, provides some relief. The unit cost for these houses has been significantly increased and now through convergence a minimum support of nearly ₹1.5 lakh to ₹1.6 lakh to a household is available. There is also a provision of Bank loan up to ₹70,000, if the beneficiary so desires.
The programme provides for skilling 5 lakh rural masons by 2019 and allows over 200 different housing designs across the country based on a detailed study of housing typologies, environmental hazards and the households’ requirements. Large-scale use of local materials is envisaged along with a complete home with cooking space, electricity provision, LPG, toilet and bathing area, drinking water, etc through convergence.
The National Housing Bank should leverage microfinance for reaching the remote areas. Eight of the new small finance banks have been originally microfinance institutions and are familiar with this segment. The main hindrance is the high cost of credit from these institutions. Since these have just forayed into deposit taking, it will take time for them to build a low cost capital base so that they can provide affordable credit. Similarly, it should design more innovative and rural friendly mortgage systems that address the typical problems of land ownership in villages.
The leading nonprofit, Landessa which is doing pioneering work in this field could be involved in training local NGOs to aid in this task. It partners with progressive governments and civil society to develop pro-poor and gender-sensitive laws, policies, and programmes that strengthen land rights for the poorest people. Their land rights experts work with government officials, local leaders, and rural residents developing scalable, practical, and innovative solutions to pressing problems like land rights issues.
It has a three-pronged approach: It conducts research on land tenure’s effects. Greater data and information make it easier for working transitions to secure property rights; it provides legal consultation and support for government officials willing to make improvements in legally vulnerable communities. Thus far, over 9,00,000 Indian families have benefitted from Landesa’s legal work; it educates communities on the various aspects of land rights, since legal systems often seem inaccessible to people who cannot read or cannot read well.
A lot of good programmes got their start when one individual looked at a familiar landscape in a fresh way. These creative and passionate individuals saw possibilities where others saw only hopelessness, and imagined a way forward when others saw none. What they did was not something too revolutionary to supplant the whole system. They simply changed the fundamental approach to solving problems, and the outcomes have been truly revolutionary.
One inspiring step has a tendency to raise the sense of possibility in others. We increasingly have the tools; but we need to summon the will the way game changers in the other fields are doing.—INFA