Need of Devising Financial Mechanism for EWS and LIG Housing

Abstract

Every individual aspires to become a house owner. However, providing housing for the Lower
Income Group (LIG) and Economically Weaker Section (EWS) poses a significant challenge in
India. The income-earning capacity of LIG and EWS is limited, and they mainly engage in the
informal sector. Due to the informal nature of economic activities, they cannot produce formal
documentary evidence to avail themselves of financial assistance. Housing ownership is highly
capital-intensive and requires financial assistance to create demand in the housing market. No
supply is made available as they cannot create any demand for housing in the market despite its
basic need. The non-availability of housing supply and financing assistance to EWS and LIG
results in the development of informal and unauthorized housing solutions. This is going to work
out in the form of a vicious circle.
The time has come to develop financial mechanisms to overcome this vicious circle, particularly
for EWS and LIG sections. All stakeholders in the housing market must be involved in creating
financial mechanisms. In this research paper, an attempt has been made to address the housing
requirements of the EWS and LIG Sections and the need to develop a financial mechanism for
their housing requirement.