How Lack Of Affordable Housing Is India’s Biggest Growth Hurdle

29 September 2025

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Did you know?

Nearly half of India’s urban population (~49%) still lives in slums, unauthorised colonies, squatter settlements, and shanties.

That’s why, million-dollar homes in Mumbai often overlook slums and Delhi’s skyline reveals a sea of unauthorised colonies but other Indian cities aren’t far behind too.

Why do informal settlements keep growing?

Because while rural-to-urban migration surges, affordable, quality housing is missing.

Formal supply mainly caters to middle- & high-income buyers → pushing migrants into slums & colonies, often carved out by local land mafias.

Is there any Progress? Yes, but it’s mixed across cities.

Slum population share fell from 55% (2002) → 49% (2020) (World Bank).

Cities like Mumbai, Ahmedabad, Chennai saw slum % decline.

But Delhi, Bengaluru, Pune, Hyderabad actually saw it rise.

What does this cost India? A lot.

Poor access to water, sanitation, schools, healthcare.

No secure land titles or regulated layouts.

Overcrowding, safety risks & weak infrastructure.

But how can this crisis be fixed?

  • Mass supply of affordable housing linked with jobs & transport.
  • Affordable rental housing near industrial hubs.
  • Livability-focused redevelopment of existing slums.
  • Stricter checks to stop unauthorised colonies before they grow.

"India must provide dignified, affordable, formal housing to millions migrating to its cities, because a country cannot truly grow while half its urban population continues to live in slums and unauthorised colonies."