News: Niti Aayog’s Gauba Urges Land Reforms, Higher FAR-12-02-2026

Land constraints are a major obstacle to housing development and wide-ranging reforms are needed to bring land costs down, Niti Aayog member Rajiv Gauba said in New Delhi, according to PTI.

Addressing an international conference organised by the National Housing Bank, he proposed reserving at least 10 per cent of residential land in master plans for affordable housing, raising permissible floor area ratios to 5-6 from the present 2-3, promoting transit-oriented development and adopting land pooling. These steps would lower land costs and unlock supply, he said.

Land now makes up 50-70 per cent of project cost, far more than in comparable infrastructure sectors. Limited access to formal credit pushes developers towards expensive finance, hurting viability, and thin margins in the economically weaker and low-income segments keep private investment away.

Noting that nearly 1 crore houses lie vacant, Gauba called for a stronger rental housing ecosystem through tenancy law reform, rationalised municipal charges, varied rental models, and anchor funds and dedicated financing mechanisms to draw in private capital.

Further measures to improve viability could include profit exemption for affordable housing projects, higher guarantee limits under the credit risk guarantee fund trust for low-income housing, fee waivers on land dedicated to affordable housing, and reduced or nil stamp duty on such units. Niti Aayog has worked with the Ministry of Housing and Urban Affairs, the Department of Financial Services and others on recommendations along these lines, and he urged both to consider implementing them.

Department of Financial Services Secretary M Nagaraju said 3 crore additional houses have been sanctioned under PMAY, 2 crore in villages and 1 crore in cities, which would take the total built under the scheme to about 7 crore by 2029. Nearly 4 crore have been constructed so far.

The National Housing Bank has disbursed Rs 60,000 crore in concessional refinance under the Affordable Housing Fund up to December 2025, benefiting 5.85 lakh dwelling units. Nagaraju said last year’s revisions to priority sector lending, including higher housing loan limits and broader definitions, are meant to increase credit to underserved areas, and that GST cuts on key construction materials should make housing more affordable.