If India Removes the 45 Lakh Affordable-Housing Cap, What Should Replace It?

Interesting breakdown. Has anyone validated this with recent site execution costs?

Interesting breakdown. Has anyone validated this with recent site execution costs?

Interesting breakdown. Has anyone validated this with recent site execution costs?

Should affordable housing be defined by price, size or what a household can actually afford?

CREDAI wants the Centre to remove the ₹45 lakh price ceiling used in the affordable-housing definition.

Multiple current reports quote CREDAI President Shekhar Patel proposing an area-only test of 60 sq m in metros and 90 sq m outside metros.

The argument is clear: rising land and construction costs make a fixed national price ceiling increasingly difficult for developers to meet.

But removing price creates another question.

Could a small but expensive apartment then qualify as “affordable”?

NITI Aayog says India already uses multiple definitions. Its own working framework uses ₹60 lakh in metros and ₹45 lakh outside metros, while RBI uses population-linked property-cost limits for priority-sector housing loans.

That suggests the policy choice is wider than ₹45 lakh versus no cap.

Should India use:

• area only;
• city-specific price limits;
• household income and EMI burden; or
• a combination of all three?

See Link -> India May Need 15 Crore More Urban Homes by 2047: CREDAI

The scale of future urban demand makes the definition important, but reclassifying homes is not the same as making them affordable.

For developers, lenders and homebuyers: what should replace the ₹45 lakh cap?