Adopting the year 2022 as the target date - coinciding with the 75th anniversary of our Independence – a number of welfare programs would be implemented, like Housing for all, Health for all, Universal Social Security and Insurance cover for the poor at an annual premium of just Rs.12
Implicit in the Budget proposals is the strategic role assigned to the banking sector in facilitating the achievement of the crucial targets set for 2022. Though the Finance Minister has not elaborated the specific task assigned to the banking sector, a proactive role has to be played by banks.
Housing for all by 2022
According to an estimation made by the Technical Group on Urban Housing Shortage, about 19 million households in urban India face housing shortage. Regarding the rural housing shortage, the Working Group on Rural Housing for the Twelfth Five Year Plan has estimated it to be 43.6 million houses. By a rough estimate, the number of houses to be built to reach the target could be anywhere over 60 million houses. Even if the Government of India and all the state governments could formulate schemes for affordable housing, the banking sector has to accelerate its lending to the housing sector. As on March 2013, banks have only 6,570,334 housing loan accounts and the amount of housing loan outstanding is Rs.4,647,112 million. It is not easy to estimate the volume of housing loans to be sanctioned to provide housing to all by 2022.
The Reserve Bank of India has announced recently a positive step to facilitate house loan borrowings below Rs.10 lakh. “With a view to encourage availability of affordable housing, it has been decided that in such cases, banks may add stamp duty, registration and other documentation charges to the cost of the housing unit for calculating loan to value ratio,” the RBI notification has said. At present there is concentration of housing loans in the urban areas in a few states. Banks may have to spread out their housing loans in the rural and semi-urban areas also.
Health for all
Inadequacy of medical facilities and its total absence in remote villages has been a major lacuna of regional development in India. In one of the earlier Five Year Plans, there was a programme aiming at Health for All. New medical colleges were permitted under this plan and a large number of medical graduates were turned out. But there has been very little improvement in the availability of medical facilities in rural India. Reluctance of the young medicos to serve in rural areas was one of the major constraints. There are more bare-foot bankers than bare-foot doctors in rural India today.
States have to increase significantly outlays on healthcare to ensure that medical facilities would be within the reach of all rural households. The corporate sector, more particularly pharmaceutical companies, who are cash rich, may be directed to utilise a part of their funds earmarked for discharging Corporate Social Responsibility, to provide health care centres in villages. Banks may have to extend financial support to young doctors to set up their clinics in rural areas.