The 2011 Census of India reveals that the urban population of the country stood at 377 million or 31.16 percent of the total population. This is estimated to have increased to 437 million by 2021, which is about 36 percent of the total population. It is projected that the urban population would grow to about 553 million in 2026. The level of urbanization is expected to reach 50 percent mark in the next 3-4 decades. Urbanisation and economic growth are closely interlinked, as more than 60 percent of Gross Domestic Product of the country is contributed by Urban India. As India moves ahead to a double-digit growth, obviously a key policy issue has emerged as to how to rejuvenate and strengthen the Urban India, which will significantly contribute and sustain the growth momentum.
Housing is regarded as an ‘engine of economic growth’ and can give a big push to the economy through its strong ‘backward’ and ‘forward’ linkages with about 250 ancillary industries. As per an IIM Ahmedabad Study (July 2000), housing investment has inter-industry linkages and investment in housing/construction sector has strong multiplier effects on generation of income and employment in the economy. A unit increase in the final expenditure on the construction sector would generate additional income in the economy as a whole, which would be almost 5 times as high as the direct income generated within the construction sector itself. Further, investment in housing has an employment multiplier effect of almost 8. This indicates that an additional unit of final expenditure in construction sector induces an overall employment generation in the economy by an extent that is eight times the direct employment generated in the construction sector itself.