New Delhi: Stressing the need for addressing housing shortage in the country, President Pranab Mukherjee today asked banks and the private sector to find ways to help economically weaker sections who are worst affected as they find it difficult to access credit.
"On the basis of the 2011 census, a technical group set up by the Ministry of Housing and Urban Poverty Alleviation has estimated that the total shortage in housing is 18.78 million in 2012 and of these 95 per cent is in the economically weaker sections and low income groups," Mukherjee said.
"Approximately 25 per cent of the urban population is living in slums and squatter settlements," he said addressing a convention organised by National Real Estate Development Council.
He said that the government is seized of the reality and is trying to make a difference through the Rajiv Awas Yojana.
"The private sector has to take more initiative to find sustainable solutions," he said, adding that the affordable housing segment should be made attractive to the private sector through direct and indirect incentives.
Mukherjee said that there are major problems that affect the efforts of the low income groups in becoming home owners, of which the difficulty in extending credit to this segment through the banking channel is most significant.
"While the high income group and middle income groups have been able to reap the benefits of the low rate mortgage loans and deductions available under the Income Tax Act and home loan disbursement has gone up many fold, the economically weaker sections and the low income households have been left behind," he said.
"Banks are reluctant to lend to them because of the perceived risk of the loan to them becoming non-performing assets. I am confident that banks would rise to the occasion to face challenge and evolve innovative methods to allow greater credit flow to this segment," he added.